TCS Q1 net flat sequentially but beats analysts forecast

India's largest software services exporter Tata Consultancy Services (TCS) has reported net profit of Rs 2,380 crore in the quarter ended June 2011, which was was better than expectations.

CNBC-TV18 poll was expecting the net profit at Rs 2,240 crore as against Rs 2,380.9 crore in previous quarter, as per International Financial Reporting Standards.

In a press conference, TCS CEO N Chandrasekaran said growth in first quarter was balanced and broadbased.

Volume growth in the first quarter was 7.5%, Chandrasekaran said. "Growth was led by BFSI, Hi-tech and retail sectors."

"Customer focus and balanced business model helped performance this quarter. Travel, hospitality and telecom were seen double digit growth," he said.

Revenues increased just 6.3% in the June quarter at Rs 10,797 crore from Rs 10,157.5 crore in earlier quarter while the poll expected at Rs 10,674 crore.

In dollar terms, company reported 7.5% rise in revenues of USD 2412 million versus USD 2244 million (CNBC-TV18 expected at USD 2385 million).

BFSI revenue increased to Rs 4,677 crore from Rs 3,672 crore and telecom segment revenue jumped to Rs 1,499 crore from Rs 1,198 crore in a year ago period. Manufacturing sales went up to Rs 818 crore in Q1 as against Rs 612 crore in same quarter the previous year.

However, earnings before interest and tax (EBIT) was down by 1.7% at Rs 2,826 crore from Rs 2,875.7 crore on quarter-on-quarter basis. EBIT margin grew at 26.2% - less as compared to 28.3% in previous quarter.

Decline in margins was slightly higher than expected on account of wage hikes and currency volatility.

TCS received forex gains of Rs 79.56 crore in the first quarter FY12 as against loss of Rs 47.2 crore in previous quarter. Company added 24 new clients.

Attrition rate in the quarter was 14.8%. Utilization (including trainees) rate was 83.2% in Q1 while gross addition in the same quarter was at 11988 employees and net addition at 3576.


Source: www.moneycontrol.com

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Gaurav Agarwal
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DENIP Consultants Pvt Ltd