Jan 15, 2013 05:08 PM IST | Source:

TCS beats street with Q3 net profit of Rs 3551 cr, up 1%

Tata Consultancy Services topped market expectations on Monday with a third quarter net profit of Rs 3,551 crore, up 1 percent, helped by new deal wins.

Moneycontrol Bureau

Tata Consultancy Services topped market expectations on Monday with a third quarter net profit of Rs 3,551 crore, up 1 percent (up 23 percent from a year ago), helped by new deal wins.

The India's largest software services exporter's revenue rose 3 percent sequentially (22 percent year-on-year) to Rs 16,070 crore.

Dollar revenues increased 3 percent to USD 2,948 million.

Analysts on average had expected TCS to report a net profit of Rs 3,410 crore on revenue of Rs 15,950 crore in Oct-Dec, according to a CNBC-TV18 poll.

TCS met or beat analysts expectations on most parameters in the third quarter, which is typically a seasonally weak quarter, and its CEO, N Chandrasekaran feels the clients will continue to invest on tech in 2013.

He once again reiterated that the company hopes to grow ahead of the NASSCOM guidance of 11-14 percent growth in the current financial year.

Infosys too on Friday had surprised the street with better-than-expected earnings for the quarter.

"We have had excellent quarter of well rounded performance and have driven a higher quality of revenue and increased profitability through focus on productivity and innovation. We had good revenue growth balanced across service lines, industries and geographies...We believe that clients are going to invest in making their operations digital-ready in 2013 and drive business growth," Chandrasekaran said.

In the last quarter, TCS' operating profit rose 5 percent sequentially (14 percent year-on-year) to Rs 4,383 crore. Operating margin expanded 56 basis points to 27.3 percent.

The company's number of USD 100 million-plus clients have increased now to 16 from 14. TCS added 31 new clients in Q3.

It signed a multi-year multi-million dollar deal with a North American healthcare company, a large service management deal with a global financial services company in the US, it won a contract  from a financial institution in Asia to upgrade and maintain core systems and infrastructure and was selected by a US-based communications company for a multi-year back-office transaction processing deal, among others.

Chandrasekaran said deal pipeline remains strong and there is no cause of worry on clients' spending. He is "very confident" of strong growth in the fourth quarter and FY2014.

TCS net added 9,561 employees and as of Dec 31, it had 2,63,637 employees.

The company had earlier announced plans to hire 25,000 from campus placements and it has already sent out offer letters to 24,000 people, said Ajoy Mukherjee , EVP and head, global human resources.

Its attrition in IT services has now fallen to 9.8 percent, with overall attrition including BPO at 11.2 percent.

TCS shares closed up 2.2 percent at Rs 1,334.50 on NSE. The results were announced after markets closed.

Nachiket Kelkar

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