TCS posts 26.7% rise in Q1 net, beats estimates

Jul 15 2011, 01:37 IST
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SummaryRevenue grows by 31.4 per cent to R10,797 crore.

Beating market estimates, Tata Consultancy Services (TCS), India’s largest software company, has posted a 26.7 per cent rise in its net profit at Rs 2,415 crore for the first quarter of 2011-12, aided by a “balanced broad-based growth”.

However, sequentially (quarter-on-quarter basis), the profit has declined by 7.9 per cent as the company had posted Rs 2,623 crore profit in the last quarter of the previous fiscal.

The revenue grew by 31.4 per cent to Rs 10,797 crore for the period under review, TCS said in a statement.

However, shares of the company dropped by 2.23 per cent to settle at Rs 1,125.25 on the bourses as jittery investors abandoned the bellwether counter before the results.

“Our customer-focused organisation and balanced business model helped us drive growth across all our major customer segments and operating regions in the first quarter,” TCS CEO N Chandrasekaran said. The board has proposed a dividend of Rs 3 a piece on shares with a face value of Re 1.

He said TCS “continues to partner with many customers to help them successfully execute their transformation agendas as well as negotiate a challenging business environment.”

“Though we continue to see a steady demand flow for our services, the uncertain global macroeconomic environment demands that we adopt an entrepreneurial approach and remain agile to capture growth opportunities as they emerge,” Chandrasekaran said.

During the June quarter, the software exporter added 3,576 employees, taking the total headcount to 2,02,190 as on June 30. The company during the quarter added 24 new clients.

Analysts were enthused by TCS results. “TCS results were above our estimates. The 7.4 per cent volume growth was the highlight. More importantly, the growth was broad-based, which lends a degree of stability to this growth, we believe. The management is confident about client spending while

being cautious on the macro scene,” said Dipen Shah,

senior vice president of Kotak Securities.

On Tuesday, Infosys had  recorded a net profit of Rs 1,722 crore for the first quarter, showing a quarter-on-quarter decline of 5.3 per cent and a 15.7 per cent rise on a year-on-year basis.

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