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TCS net profit up 44 % in Q2

Pick-up in discretionary spend by clients and revenue growth across geographies saw Tata Consultancy Services (TCS) report a net profit of Rs.3,512.3 crore for the second quarter of 2012-13, a 44 per cent growth over the year-ago figure of Rs.2,439 crore.
During the period, the company’s revenue was up 34.3 per cent at Rs.15, 620.8 crore. The operating profit grew 32.5 per cent to Rs.4,179 crore. TCS has declared a second interim dividend of Rs.3 per share of Re.1 each.
Addressing a press conference here on Friday, N. Chandrasekaran, CEO & MD, said, “We delivered a strong performance with growth across industries and geographies. As the global operating environment continues to evolve, there is little doubt that technology is playing a more pivotal role to shape the future of every industry than ever before. Customers are getting more adapted to the macros and higher discretionary spends are back. We are investing hugely in areas such as digital in an effort to be holistic with clients.”
During the period, while the operating margin fell 36 basis points to 26.8 per cent, the net profit margin grew 151 basis points to 22.5 per cent. The CEO said, “One should not read too much into the drop in operating margins as we are positive on growth. A lot of growth came from emerging markets and our onsite work went up significantly. We are doing a big transformation project in Europe where cost incurred is high.” The company added 41 new clients and signed 11 large deals during the second quarter.
S. Mahalingam, CFO and Executive Director, said, “During the quarter, TCS has posted a credible margin performance at the operating level, and we have also expanded our net margins by managing the ongoing currency volatility.” He said the company expected pricing to remain stable for the rest of the year.
Ajoy Mukherjee, Executive Vice-President, and Global Head, HR, said there was a total gross addition of 18,654
people and net addition of 10,531 during the quarter. TCS’ employee strength at the end of the quarter was 254,076.
The attrition rate fell to 11.4 per cent overall.
In the first-half of 2012-13, TCS reported a 41 per cent higher net profit of Rs.6,793 crore on 36 per cent higher
revenues of Rs.30,489.5 crore. Operating profit rose 38.3 per cent to Rs.8,268.6 crore and margins were up 46 basis
points at 27.1 per cent.


Sandip Ginodia
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