Global Services Blog

TCS Earnings Jump – The Telegraph – Calcutta Kolkata | Business | TCS earnings jump 47%

Posted on April 20, 2010 by Atul

They’re back. The growth for offshore players is coming back.

We have been advising a number of firms and see growth definitely coming back for the offshore leaders. Think it’ll still be a little bumpy for the Tier 2 players but it’s back.

TCS earnings jump 47% – The Telegraph – Calcutta

Chandrasekaran in Mumbai on Monday. AFPMumbai, April 19: Tata Consultancy Services TCS — the country’s largest software exporter — today beat analyst estimates by posting a 47 per cent growth in net profits for the fourth quarter ended March 31, 2010.Net profits of the country’s largest IT service provider rose to Rs 1,931 crore compared with Rs 1,314 crore in the corresponding period in the previous year.Analysts had forecast that the company would report net profits in the region of Rs 1,800 crore.In US GAAP terms, TCS reported revenues of Rs 7,736.5 crore, higher than Rs 7,171.8 crore in the corresponding period last year.In 2009-10, net profits were placed at Rs 6,872.9 crore Rs 5,171.8 crore even as it achieved a major milestone when revenues peaked at Rs 30,028.9 crore.The sparkling results came in the face of margin pressures on account of currency movements. During the period, the rupee gained against the US dollar and other currencies. Analysts say a 1 per cent appreciation in the rupee’s value can hit margins of IT companies by 50 basis points.Addressing a press conference soon after unveiling the results, S. Mahalingam, chief financial officer and executive director of TCS, admitted that the exchange rate had a negative impact on the company’s margins.However, on a sequential basis, the company was successful in improving its margins by 51 basis points as it focused on productivity improvement even as it pared costs.N. Chandrasekaran, chief executive officer and managing director, explained that there were various reasons behind the good performance. He said all verticals and all geographies contributed to the robust performance.The company was also successful in winning large deals. For instance, a European government agency awarded it a $500-million contract and the company won another multi-year contract worth $100 million. Among the verticals, financial services, retail and life sciences led from the front, while sectors such as telecom and manufacturing lagged.Chandrasekaran, however, had a positive outlook for the months ahead. “Traction is happening across the board. Emerging markets are picking up, there is a broad-based growth across verticals. We see growth being led by the US and emerging markets, followed by the UK and Europe,” he added.Ajoy Mukherjee, vice-president and head of global human resources, said the company was raising salaries for its employees both here and overseas. The salaries of its Indian workforce had been raised by 13 per cent. He added that TCS has made 20,000 campus offers in the current fiscal.

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