*Tata Consultancy Services on Wednesday reported a relatively soft set of numbers for the three months to March 2014 but was confident FY15 would be a better year. Net profit for Q4FY14 came in at R5,297 crore, up 2.3% sequentially on the back of a rise in revenues to R21,551 crore, an increase of 1.2% quarter-on-quarter.
The numbers were supported by a 2.6% increase in volumes, stable pricing and a pick- up in business across a host of geographies led by Europe and Asia Pacific. However, Ebit (earnings before interest and tax) margins slipped 60 basis points sequentially to 29.1%.
India’s biggest software services exporter ended FY14 with revenues of R81,809.4 crore, up 29.9% and net profits of R19,116.8 crore, up 37.5%.
N Chandrasekaran, managing director and CEO, told newspersons he believed the current year would be a stronger one for TCS based on discussions with clients, the deal pipeline, the general sentiment and the trends in discretionary spends.
“We’re getting positive feedback from our clients and we believe there is good growth momentum,” Chandrasekaran said, adding that customers appeared to be focussed on IT spends in three areas, namely simplification, digital and governance.
The CEO said he expected pricing to remain stable for some time. “The flat trend in pricing will continue for some time and the growth will come from volumes. We expect a pick-up once we scale up in the digital space,” he said. Revenues from the digital space could hit $3-4 billion in the next few years.
Rajesh Gopinathan, CFO, said TCS would continue to post operating margins in a band of 26-28%.
The IT major expects the BFSI space will continue to be a big revenue earner as would verticals such as retail and life sciences. At the end of March, TCS had 24 clients with revenues of $100-million plus.
The company will hire 55,000 employees this year, Ajoy Mukherjee, executive vice-president and head, global HR, said, of which the campus recruitments of 25,000 have been completed. In FY14, TCS hired 61,200 people and the head count has crossed the 300,000 mark.
“Attrition remains under control,” Chandrasekaran said. TCS’s attrition rate stood at 11.3 %. The company announced wage hikes of 10% for India employees, with a 14%-plus increment for high-level performers; the hike in developed markets is 2-4% while in developing markets it is 4-6 %. The TCS stock closed 2.51% down at Rs