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It’s a stellar quarter: TCS CEO

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CIOL Bureau
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MUMBAI, INDIA: Tata Consultancy Services Ltd (TCS), India’s leading IT and software services exporter reported high revenue and net profit for the third quarter of fiscal 2010-11 beating market estimates.

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In third quarter, TCS reported a 4.1 per cent quarterly rise in its consolidated Rs.9963 crore revenue and the net profit grew 9.3 per cent quarterly at Rs.2370 crore, which is 30 per cent increase on a yearly basis.   

“It’s a stellar quarter. The revenue grew 4.1 per cent quarterly, operating profits up by 5 per cent and overall 5.7 per cent volume growth. We had excellent client addition due to a good demand momentum, added highest number of staffs with low attrition rate in this quarter,” said N. Chandrasekaran, TCS CEO.      

Company’s operating profits reached at Rs.2707 crore with 5 per cent quarterly rise and net profit margin grew 24.5 per cent, which is a 115 basis points improvement quarter on quarter (Q-o-Q).

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“TCS results came in above expectations. The 5.7 per cent volume growth in a seasonally lean quarter is encouraging. Improvement in operating margins was also a pleasant surprise. We expect the stock to do well,” said Dipen Shah, Kotak Securities’ senior vice president (PCG Research).

About 35 new foreign clients were added across verticals in the deal size range of $1 million to $100 million. TCS international business revenues grew 7.8 per cent in dollar terms and its offshore revenues moved 30 basis points at 51.4 per cent, while revenues from non-Indian Global Network Delivery Model (GNDM) centers grew 4.9 per cent.

“Growth was witnessed across sectors in double digits except in telecom sector both in India and Latin America. Services, BPO, infrastructure, pharmaceutical and others — all grew double digits giving a total volume growth of 5.7 per cent,” added Chandrasekaran.

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He pointed that the macro economic scenario is dynamic, which still remains a concern and need to be watchful. However he confidently said that the customers embarking on growth and improving cost efficiency will increase demand and push the growth.

“Our revenue shares from Europe and UK markets have constantly improved every quarter. Though the macro economic situation is dynamic, but still there are demands where customers are looking for improving cost efficiency and growth by adopting our business model. And we see opportunities for business,” explained Chandrasekaran.

While, IT companies have bowed to pricing pressures affecting productivity, Chandrasekaran commented, “Pricing and productivity has improved every quarter, which has resulted into growth; however this growth is not happening at discount of pricing.”       

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