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[January 17, 2014]
Software czar TCS continues to reign [Mail Today (India)]
(Mail Today (India) Via Acquire Media NewsEdge) THE country's largest software exporter Tata Consultancy Services ( TCS) continues to reign the IT industry reporting a whopping 50.3- per cent jump in thirdquarter net profit at ` 5,333 crore on Thursday aided by all- round business growth and forex gain. TCS had reported a consolidated net profit of ` 3,550 crore in year- ago period.
TCS reported three- per cent sequential revenue growth in dollar terms for the quarter ended December. Revenue stood at $ 3.44 billion on the back of a strong showing from industries like life sciences and health care, manufacturing, media, travel and hospitality, and telecom.
The numbers, however, were below analysts' expectations, many of whom had anticipated that the company would post growth above three per cent.
TCS' dollar revenue growth, however, was lower than smaller rival HCL Technologies, which grew four per cent in the quarter to touch $ 1.3 billion. However, TCS was ahead of Infosys, which reported an increase of 1.7 per cent over the September quarter reaching $ 2.1 billion. In rupee terms, TCS grew 1.5 per cent to ` 21,294 crore in the December quarter.
In profit growth, TCS beat street estimates. Profits stood at ` 5,314 crore, or ` 27.13 a share, up from ` 4,702 crore, or ` 24 a share, in the previous quarter. The operating margin was 29.7 per cent with the company reporting an utilisation of 84.3 per cent, one of the highest in the industry. TCS declared a dividend per share of ` 4.
The company increased its hiring target for the year to 55,000 from 50,000, a reflection of the improved demand environment.
It maintained FY15 guidance of hiring 25,000 campus graduates.
Chief executive officer and managing director N. Chandrasekaran said that 2014 will be a better year for the company compared to 2013. " Our diversified market presence and services portfolio have helped us overcome seasonal weakness and soft demand in the Indian market." Operating profit rose to ` 6,335 crore, a growth of 44.6 per cent year- on- year and 0.1 per cent quarter- on- quarter, Chandrasekaran added. TCS added two $ 50 millionplus clients in the quarter while the overall large clients rose by eight and that of $ 20 million- plus clients rose by four.
Although TCS missed dollar revenue expectations, analysts seemed happy. " In dollar terms, we were expecting a four- per cent growth. However, I am not disappointed given the seasonally weak quarter. The company's commentary is positive and it expects the next year to be stronger," Sanjeev Hota, analyst, Sharekhan, said.
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