Tata Consultancy Services (TCS) on Thursday turned in a satisfactory set of numbers with a net profit of R5,314 crore for the three months to December, up 13% sequentially. Dollar revenues grew 3% sequentially to $3,438 million while rupee revenues came in at R21,294 crore, a rise of 1.5% quarter-on-quarter and in line with analysts’ estimates. While the bottom line was helped by a forex profit of R299 crore, operating margins came in at 29.7%, down 42 basis points and a tad lower than estimates.
N Chandrasekaran, CEO and MD, said initial indications for the coming year were bright. “We believe FY15 is going to be a stronger year than the current one. Pricing should be stable for most businesses, discretionary spends are happening in the digital space and the size of such spends is increasing,” the CEO said. The digital business is expected to contribute materially to the firm’s top line in the coming years.
TCS reported a blended volume increase of 1.8% while for the international business volumes rose 2.9% in what is a traditionally weak quarter. With the exception of India, all markets grew during the quarter. The firm’s realisations saw an improvement of 74 basis points sequentially. Cash flows during the quarter were among the strongest in recent times with TCS reporting earnings before interest and tax of R6,335 crore.
Chandrasekaran observed that the firm had added customers across revenue bands in the December quarter, saying the deal flow had been good. “We closed eight large deals in the quarter and the order book is healthy. Moreover, the pipeline is healthy and our ability to participate in re-bid deals is increasing. We will participate in more such deals in 2014,” the CEO said.
TCS has upped its hiring target for FY14 by 5,000 and will end the year with gross additions to the employee base of 55,000 people. Ajoy Mukherjee, HR head, TCS, said campus hiring in FY15 would be in the region of 25,000. In the December quarter. TCS’ utilisation was a strong 84.3% .