TCS April-June profit down 3% on quarter: IT major's earnings in 4 graphics

Tata Consultancy Services (TCS), the country’s largest software exporter, today said its profit after tax rose 48 percent sequentially to Rs 5,709 crore during the first quarter of 2015-16. Its revenue, meanwhile, rose 6 percent to Rs 25,668.11 crore.

The profit was up 2.1 percent on year and revenue 16 percent. The net profit was higher than analysts’ expectations of Rs 5,466 crore in a CNBC-TV18 poll.

However, it has to be remembered that the company had given a one-time bonus of Rs 2,628 crore in the January-March quarter. If that is taken into account, the net profit has actually fallen sequentially by about 3.33 percent.

Rupee revenue, meanwhile, increased 6.1 percent on quarter to Rs 25,700 crore and dollar revenue 3.5 percent to $4,036 million during the quarter.

Margins on earnings before interest and tax declined 91 basis points on quarter to 26.3 percent, ahead of CNBC-TV18 estimates of 25.64 percent.

“Demand from our core markets like North America and greater traction for digital solutions in key verticals like financial services, retail and live sciences has driven volumes and growth in Q1. Our significant investments in IP and platforms, digital capabilities and our execution track record gives us a firm foundation to capture growth in the current financial year,” CEO and MD Chandrasekaran said in the press release.

He also said given the strong opportunities offered by the digital space in the country, the company is investing to train 100,000 professionals this year.

“Our disciplined approach to all aspect of operations have helped maintain operating margins within our stated range despite hedging volatility and the impact of out annual cycle of salary hikes and promotions. We continue to focus on optimising our cash conversion ratios and investing in people and technologies ahead of our business needs,” CFO Rajesh Gopinathan said.

The company added 20,302 staff on a gross basis during the quarter. Its total employeee strength stood at 324,935. The employee utilisation rate excluding trainees was 86.3 percent.

According to the press released, it has added in 10 clients in $20 million+ band and one client each in $50 million+ and $100 million+ bands.

During the first quarter, TCS posted the incremental revenues of $136 million driven by strong growth across core markets led by North America, UK, Europe, MEA and Asia-Pacific, the released said.

Growth among industry segments was led by retail, life sciences, BFSI and Telecom. Asset-leveraged solutions led the growth among service lines followed by infrastructure, assurance and BPS, it said.

Shares of the company fell nearly 3 percent today ahead of its first quarter earnings. The bellwether stock went down by 2.80 percent to settle at Rs 2,521.40 on BSE. In intra-day, shares of the IT firm lost 3.4 percent to Rs 2.505.75.

Following the dip in the stock, the company’s market valuation plunged Rs 14,229.33 crore to Rs 4,93,873.67 crore.

“Q1 is a seasonally strong quarter. This time around, cross-currency stabilisation and INR depreciation are additional tailwinds to earnings,” Motilal Oswal Securities had said in a report before the earnings. Meanwhile, in the stock market, the BSE 30-share Sensex ended at 27,573.66, down 114.06 points.

With data inputs from Kishor Kadam