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The continuing demand for IT services across developed markets coupled with a spike in non-operational income has propelled Tata Consultancy Services to record a 30 per cent rise in net profit for the third quarter ended December 31.
The Mumbai-headquartered company — which writes software applications and manages back-office processes for multinationals such as GE, Citibank and Ferrari as clients — recorded a net profit of Rs 2,370 crore as against Rs 1,824 crore reported in the year-ago period. Revenues for the quarter under review were up by 26.3 per cent to Rs 9,663 crore (Rs 7,648 crore).
“More and more customers are opting for our business model and that is driving pricing and volumes for the company…growth has come across geographies and verticals,” Mr N. Chandrasekaran, Chief Executive Officer and Managing Director, said at a press conference here, on Monday.
Volumes were up by 5.7 per cent in a quarter where TCS added 25 new customers. Geography wise, Asia Pacific and West Asia and Africa led the pack with a growth of 18.4 per cent and 16.6 per cent respectively, according to Mr S. Mahalingam, Chief Financial Officer and Managing Director. Its business in its largest market — the US and debt-hit continental Europe —grew 6.4 per cent each.
Though the domestic business for TCS was a laggard, Mr Chandrasekaran is not very concerned.
“The fall in India business is coming on the back of spectacular growth of 20 per cent in the second quarter. Overall, we are happy with the India business especially in a market which is lop-sided towards discretionary spending and not annuity business,” he said.
TCS' mainstay financial services business grew by 6.5 per cent in constant currency terms while its back office operations went up by around 10 per cent.
Other income
The company's cause was helped by a spike in other income, which stood at Rs 194.2 crore at the end of the quarter. Majority of other income came from hedging gains of Rs 52 crore (as against loss of Rs 52 crore in the year ago quarter) and ‘increase in yield of investments.'
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