Financial Daily from THE HINDU group of publications
Friday, Jan 13, 2006
Financial Daily from THE HINDU group of publications Friday, Jan 13, 2006 |
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Software Corporate Results - Software Info-Tech - Financial Performance TCS Q3 net up 5.6 pc at Rs 753 cr — Impact of Re fluctuation Rs 46 cr Our Bureau
Mumbai , Jan.12 DRIVEN by new client wins and ramp-ups from contracts won in the previous quarters, Tata Consultancy Services has reported a 5.57 per cent increase in its consolidated net profit for the third quarter ended December 31, 2005, on the back of a 28.7 per cent increase in revenues. Net profit for the quarter amounted to Rs 753 crore as against Rs 713 crore reported for the corresponding quarter last fiscal. This is no modest profit increase, according to Mr S. Ramadorai, CEO and MD of TCS. "Last year, the third quarter saw a foreign exchange realisation of Rs 109 crore, which was a one-time gain. If you take away that, our real profit growth is phenomenal." Against that, TCS's net loss from the impact of the fluctuation of the rupee during the quarter currently ended was around Rs 46 crore, said Mr S. Mahalingam, Chief Financial Officer. "Solid volume growth on the back of key customer wins during earlier quarters, as well as significant domain-led engagements in verticals like BFSI (banking and financial services and insurance), retail and utilities continued to fuel TCS' growth during Q3," he said. Income from operations, growing over 28 per cent, touched Rs 3,288 crore (up from Rs 2,554 crore a year ago). Employee costs and overseas business expenses drove up total expenditure by 28.8 per cent, at Rs 2,345 crore as against Rs 1,821 crore earlier. To some extent, a reduction in equipment sales in India (which is a margin enhancing activity) as well as the acquisition of Chile-based Comicron and Australia-based FNS (though they shored up the topline) impacted margins. Pricing, said Mr Mahalingam," has been pretty flat." Euro earnings as a percentage of revenues rose by 1.5 percentage points and stood at 23 per cent. Overall, the company added 83 clients during the quarter. The company's top client GE's contribution to revenues increased to 6.4 per cent during the quarter from 5.8 per cent in the second quarter of the fiscal. However, it fell to 11.4 per cent of international revenues, down from 12.3 per cent in the immediate previous quarter. For the next quarter, the company sees growth arising from its various strategic initiatives. TCS has announced an interim dividend of Rs 3 per share. On the BSE, TCS shares ended 0.39 per cent higher at Rs Rs 1,678.25.
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