TCS Q3 profit rises 5.1% on US, Europe-driven growth

The tech major has reported revenues of Rs 24,501 crore, a rise of 2.9 per cent on sequential basis and 15.1 per cent on a year-on-year basis.

By: ENS Economic Bureau | Mumbai | Published:January 16, 2015 2:58 am

Tata Consultancy Services, India’s largest IT company, has reported a lower-than-estimated 5.1 per cent rise in net profit at Rs 5,444 crore on a year-on-year basis for the quarter ended December 2014. The profit showed a 2.9 per cent rise on a sequential basis

The tech major has reported revenues of Rs 24,501 crore, a rise of 2.9 per cent on sequential basis and 15.1 per cent on a year-on-year basis. Infosys had last week posted a 13 per cent rise in year-on-year net profit that beat market estimates.

TCS managing director & CEO N Chandrasekaran said: “We have maintained our momentum in a traditionally weak quarter for the IT industry. In constant currency terms, we have seen significant growth in USA, Europe as well as emerging markets like Latin America, Middle East and Africa. Our diversified industry portfolio and presence across key markets have helped us overcome soft seasonal demand in some sectors.” TCS shares gained 1.09 per cent on the BSE on Thursday.

The operating margin for Q3 was 27 per cent. “Based on our progress this quarter, we are well on our way to post industry-leading growth for FY15. In areas like digital, simplification and governance, we continue to partner closely with customers to help them prepare their businesses to succeed in an economy where the default is digital,” he said.

The company said sharp cross currency movements have impacted dollar revenues, but it continued “to manage operations with discipline and rigour while investing in people, capabilities and infrastructure on an ongoing basis”.

Growth in Q3 was driven by industries like telecom, hi-tech and life sciences. Europe led growth, driven by the investments made in that market, while North America also grew during the quarter. Among emerging markets, Latin America and MEA registered strong growth. Among service lines, global consulting, asset leveraged solutions, infrastructure services and assurance services were the leaders.

The company said there was a total gross addition of 16,561 people (net addition of 4,868 employees) taking the total employee strength to 318,625 employees on a consolidated basis. The utilisation rate (excluding trainees) was at 86.7 per cent and that including trainees was 82.1 per cent. The attrition rate (LTM) was at 13.4 per cent.

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