The Hindu Business Line : TCS net rises 76 pc in Q4

GOOD JOB: Mr S. Ramadorai, CEO & Managing Director, TCS (second from left), with Mr N. Chandrasekaran, Executive Vice-President and Head, Global Operations; Mr Phiroz Vandrevala, Head, Global Corporate Affairs; and Mr S. Mahalingam, CFO and Head Global Finance, at a press meet in Mumbai on Monday. — Shashi Ashiwal

Mumbai , April 17

Tata Consultancy Services (TCS) has reported a 76.38- per cent increase in its consolidated net profit on a 44 per cent increase in income from operations for the quarter ended March 31, 2006.

Net profit jumped to Rs 832.12 crore from Rs 471.79 crore in the corresponding year-ago quarter. Total income rose to Rs 3,709.21 crore, up from Rs 2,578.45 crore.

For the year as a whole, net profit rose by 50.07 per cent, to Rs 2,966.75 crore, up from Rs 1676.90 crore. Income from operations rose nearly 36 per cent, to Rs 13,252.15 crore (Rs 9,844.60 crore).

Key customer wins, strategic acquisitions and large multi-year sourcing deals accounted for the growth, said Mr S. Ramadorai, CEO and Managing Director, at a news conference here today.

"By and large in new contracts there has been an uptake in price too," he said.

The results for the quarter and year include those of Tata Infotech, which was amalgamated into the company, and are strictly not comparable with those of the previous year.

Profit before additional incentive, interest, depreciation taxes and exceptional items amounted to Rs 3,798.19 crore (Rs 2,909.96 crore). Profit before taxes and exceptional items amounted to Rs 2,997.05 crore (Rs 2,236.70 crore).

The company's operating margin showed a dip of a little over 2 per cent over the year - 1.3 per cent of this slide was due to foreign exchange fluctuations and one per cent on account of the hit from the amalgamated Tata Infotech. However, on the net profit level, margins were maintained, said Mr S Mahalingam, Chief Financial Officer, TCS.

New clients

The company added 330 clients during the year and currently has 748 active clients.

Large deals will continue to drive the growth momentum, said Mr Ramadorai. Large deals provide predictable income and efficient management of these multi-year deals improves margins. In addition, cross selling with these same clients are usually done at a different prices, he said. A large deal (over five years) of $500 million is going to be signed with a "very big name," said Mr N. Chandrasekharan, Executive Vice-President, TCS. TCS's joint venture with the Government of China, which has been for some time in the making, will also be announced in a month's time.

Bonus issue

TCS has announced a bonus of 1:1 and a dividend of Rs 4.50 per share that takes its whole year dividend to Rs. 13.50 a share.

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