TCS Q1 FY13 Profit Up by 13.14 Percent

Bangalore: Tata Consultancy Services (TCS), country's largest software exporter, is reported to gain after tax of 3318 crore, which is up by 13.14 percent, against 2932.40 crore in the last quarter. According to market analysts the results are according to the estimates and is not disappointing like Infosys Technologies.

Revenues for quarter ended June 2012 stood at 14,869 crore against 13,295 crore in previous quarter. The operating margin for the quarter came in at 27.5 percent as against 27.62 percent in the previous quarter. The company has declared an interim dividend of 3 per share of 1 each, according to a BSE filing.

The company added 29 new clients and the high utilisation rates (excluding trainees) was maintained at 81.3 per cent. While the gross addition of employees stood at 13,831, the attrition rate for the first quarter was at 12 per cent. The company expects currency volatility to remain a challenge in the short term.

Commenting on the results, CEO N Chandrasekaran said, "We've seen strong, secular growth across service lines and industry segments driven by robust volumes from key markets." He added that investments in new technologies and platforms are bearing fruit with increasing market traction.

Chandrasekaran also said, "We continue to see good demand from global corporations as they successfully navigate an increasingly complex business environment." He expressed confidence at playing a pivotal role in our customers' future business evolution.

S Mahalingam, CFO, TCS, said, "Our ability to closely monitor and maintain our operating expenses to support higher revenues is helping us maintain healthy margins. This ensures that we are able to continuously make investments needed in technology, capabilities and infrastructure to fuel growth over the long-term."

"The unprecedented volatility among major currencies and the Indian rupee will continue to be a challenge in the short term and we are taking the steps to mitigate any risks arising from this scenario," he added.

Commenting on the numbers, Harit Shah of Nirmal Bang Securities said, "The results are much in line, in fact slightly better than what we were expecting. Their topline was expected at about $2708 million, they achieved $2728 million. The net profit is also well above expectations. So at least from the headline numbers, the results seem to be quite decent and much better than Infosys."

"Infosys is clearly facing certain company-specific problems and even client-specific problems, whereas obviously TCS does not quite seem to be having the same issues," he added.

Shares in TCS closed the day at 1236.10, down 1.80 percent on the Bombay Stock Exchange.

Earlier in the day, Infosys reported a 32.92 percent jump in consolidated net profit to 2,289 crore for the first quarter ended June 30, 2012.

The company had posted a net profit of 1,722 crore for the April-June quarter of the previous fiscal (2011-12), Infosys said in a filing to the BSE.

(With Inputs From Agencies)