TCS net profit up 48.2% in Q4, in line with estimates - Livemint

Shares of TCS closed at Rs.2,196.30 on Wednesday. Photo: Mint

Tata Consultancy Services Ltd (TCS), India's largest software services exporter, posted net profit and revenue in line with analysts' estimates in the March quarter, spurred by growth in Europe, the UK and Asia-Pacific regions, even as the management said it will perform well in fiscal 2015.

TCS had cautioned analysts about muted growth in March but posted a net profit for the quarter ended 31 March at Rs.5,358 crore, which was up 48.2% from a year ago and 0.5% from the preceding three months.

Revenue at Rs.21,551 crore rose 31.2% from a year ago and 1.2% over the preceding quarter.

A Bloomberg poll of 39 analysts had estimated net profit at Rs.5,196.4 crore and 41 analysts estimated net sales at Rs.21,689.2 crore.

For the full year ended 31 March, TCS's revenue at Rs.81,809 crore rose by 29.9% from a year ago while net profit at Rs.19,164 crore was up 37.7%, the company said on Wednesday.

TCS does not provide annual or quarterly forecasts unlike most IT companies but N. Chandrasekaran, chief executive officer and managing director of TCS, said the company was "upbeat that the next 12 months will bring many more opportunities for growth across multiple industries and markets".

On Tuesday, Infosys Ltd, India's second largest software services exporter, forecast a higher-than-expected increase of 7-9% in dollar revenue for the year to 31 March, but warned that it still faces headwinds in the US and European markets as clients tighten technology budgets.

Volume growth of TCS at 2.6% in the March quarter exceeded the 0.4% volume growth of Infosys that announced its results on Tuesday.

Chandrasekaran said the performance, among other things, was because of "improved" quality of growth and expansion "in newer markets like Europe during the past 12 months", adding that "strategic investments, including those in Digital Technologies are providing a compelling value proposition as well as helping us anticipate and shape new market trends successfully".

Europe led growth in major markets, while the UK and North America continue to grow in line with the company average, said TCS. All major industry verticals grew in double digits led by retail, manufacturing, life sciences and healthcare and BFSI (banking, financial services and insurance) during fiscal 2014.

The total employee strength of TCS stood at 300,464 professionals as on 31 March.

In the March quarter, TCS added 9,751 employees. The company said its overall attrition rate was at 11.3% with IT attrition at a low of 10.4%, which was better than the attrition rates of Infosys (high of 18.7%).

TCS shares fell 2.51% to close at Rs.2,195 on Wednesday on BSE, while the benchmark Sensex dropped 0.92% to close at 22,277.23 points. The BSE IT Index dropped 2.49% to close at 8,800.81 points. TCS reported its earnings after the end of trading on Wednesday.

In the March quarter, TCS shares fell 1.97% while the Sensex gained 5.74% and BSE IT Index dropped 3.22%.

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