Big profits to continue, says TCS

The stock markets sensed it earlier in the day. By Monday evening, India8217;s No. 1 software major Tata Consultancy just confirmed it.....

The stock markets sensed it earlier in the day. By Monday evening, India8217;s No. 1 software major Tata Consultancy just confirmed it: 8216;8216;The Indian software success story is here to stay.8217;8217;

Tata group firm TCS8212;like its peers8212;defied gravity yet again as it announced a 76 per cent quarterly profit growth on Monday at Rs 750 crore as compared to Rs 426 crore recorded in the same period of last year.

TCS announced a dividend of Rs 4.50 per equity share of Re 1. It also announced a bonus issue in the ratio of one equity share of the company of Re 1 each for every one equity share held by the shareholders.

TCS said its net profit for fiscal 2006 was Rs 2,966 crore, up 50 per cent as compared to Rs 1,977 crore last year. Total income

increased to Rs 13,386 crore in FY06 from Rs 9,844 crore in FY05. Its total income for the quarter was up Rs 3077 crore, up 44 per cent.

The outlook is positive: 8216;8216;As an integrated full services player with global footprint and scale, TCS has the right structure and leadership team in place globally to take advantage of this tremendous opportunity in the market place,8217;8217; said S. Ramadorai, CEO and MD here today.

Last Friday, India8217;s No. 2 software firm, Infosys announced a 21 per cent jump in quarterly profit and forecast better earnings ahead on an outsourcing boom. The stock markets today shot up by 300 points led by bellwether Infosys, which rose nearly 7 per cent to Rs 3,230.30. TCS climbed nearly 6 per cent to close at Rs 1,903.60 though the results were announced after the markets closed for the day.

Story continues below this ad

Analysts said the results are in line with expectations. 8216;8216;TCS has come out with very good numbers though the margins have dipped a bit,8217;8217; says R Ravi, infotech analyst with Karvy. 8216;8216;In the coming months, all top companies will continue to do well as they are changing their pricing policy by signing up short-term contracts with their clients,8217;8217; he added.

As expected by the analysts, TCS said it was bullish about the future. The company plans to add 30,500 people in 2006-07 and has already made 9,200 campus offers for new recruits in 2006-07.

The other smaller infotech firm from the house of the Tatas, CMC said it made a profit of Rs 8.5 crore as compared to a Rs 16 crore loss in the same period of last year. Its income grew to Rs 259 crore as compared to Rs 215 crore recorded in the same period of last year.