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Tata Consultancy Services Ltd. Source Name: Tata Consultancy Services Ltd.

TCS Q2 Results FY 14-15: Strong Volumes Drive Steady Growth in Q2

Revenue at Rs. 23,816 Crore up 7.7 % Q-o-Q; up 13.5 % Y-o-Y

Oct 16, 2014   18:49 IST 
Mumbai, Maharashtra, India

Net Profit at Rs. 5,288 crore up 4.6 % Q-o-Q; up 13.6% Y-o-Y

Strong Volume growth at 6.1%

Crosses Milestone of employing 100,000 women professionals

 

Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading IT services, consulting and business solutions firm reported its consolidated financial results according to IFRS for the quarter ended September 30, 2014.

 

Financial Highlights for Quarter Ended September 30, 2014

  • Operating Profit at Rs. 6,394 crore; Growth of 10 % Q-o-Q

 

  • Operating Margin at 26.8 %

 

  • Dividend per share of Rs. 5

 

  • Earnings Per Share at Rs. 27.00

 

 

Business Highlights for Quarter Ended September 30, 2014

  • Gross employee addition: 20,350

 

  • Total headcount: 313,757

 

  • Utilization: 86.2% (excluding trainees) & 81.3% (including trainees)

 

  • Four $50+ million clients added; Nine $20+ million clients added

 

 

Commenting on the Q2 performance, Chief Executive Officer and Managing Director, N Chandrasekaran said: “Driven by strong volumes and robust utilization rates, this has been a quarter of steady, consistent performance. Our well-rounded showing has been highlighted by broad-based growth in our key markets, industries and services as we continued to deepen our engagement with customers.”

 

Mr Chandrasekaran added: “Our customers are focused on using Digital technologies to reimagine their business in multiple dimensions and with our significant investments as well as deep capabilities in these areas, we remain well positioned to act as a catalyst and enable their business innovation across the enterprise.”

 

Rajesh Gopinathan, Chief Financial Officer, said: “We remain focused on supporting business growth by optimizing our operations and maintaining margins in our desired range. Our cash generation has been strong resulting in high cash conversion ratios and we continue to make investments for the business growth.”

 

Growth in Q2 was broad-based with all industries growing on a sequential basis. The impact of the integration of newly merged entity in Japan also provided additional growth to units like Manufacturing, Hi-Tech. All core markets like North America, Europe and UK grew smartly. Emerging markets continued to be volatile with India growing while Latin America faltered in Q2. There was balanced growth across IT and other service lines led by Infrastructure Services and Engineering Services.

 

Select Key Wins

  • Chosen as a strategic partner by a leading North American diversified process manufacturing major for providing Application Management & Support services

 

  • Chosen as the Technology Partner by a leading European Global Communications Software and Services Company and has been awarded the full Service Desk, Application Maintenance and Development portfolios

 

  • Selected by a leading North American Investment Management Company as the sole right sourcing partner for providing Application Development, Assurance & IT Infrastructure Services

 

  • Won an engagement to provide Infrastructure Services to a leading European oil services company

 

  • Chosen as a strategic partner by a large North American health plan provider to provide next generation infrastructure solutions

 

  • Selected by a leading UK-based mutual Financial Institution as their strategic partner to manage their core banking systems and Business Process Management Platform

 

  • Chosen by a North American Utility major as a Strategic Partner to provide managed services across applications and infrastructure

 

  • Chosen by a leading UK based Airline as its strategic partner to provide end to end Application and Infrastructure Transformation services across the Enterprise

 

Key Wins in Digital Services and Solutions:

  • Selected by a global technology pioneer to help architect and deliver its workplace re-imagination initiative

 

  • Selected as a strategic partner by a North American property and casualty insurance company to drive its digital technology initiatives that involve policies and customer lifecycle management

 

  • Selected by a North American commercial bank as a strategic partner to transform their Information Management landscape

 

  • Selected by one of the largest retailers in Asia-Pacific for complete migration of their structured and unstructured data to a Hadoop based platform using the TCS Active Archive™ Big Data product

 

  • Won an engagement with an Asia Pacific airline, to enable hyper-connected social collaboration within their operations unit by leveraging TCS Knome™ product

 

  • Engaged by a leading European Airline company to enhance all their customer facing channels including web, mobile and airport kiosks

 

  • Engaged by a leading North American Bank to establish a Centre of Excellence for Creative Design

 

  • Engaged by a multi-brand online retailer to provide consulting services for personalized promotions at scale, product recommendations, and customer strategy and lifecycle management

 

  • Engaged by a leading global bank to set up a User Experience Center for its retail banking division

 

  • Engaged by a leading provider of general hospital healthcare services in the United States to consolidate huge volumes of data and enable analytics

 

  • Engaged by an American drug wholesale company to provide consulting, implementation and enhancement for their data management initiative

 

Innovation and Intellectual Property:

  • As of September 30, 2014, the company has applied for 1931 patents including 94 applied during the quarter. Till date, the company has been granted 150 patents.

 

Human Resources:

The company continued to hire to support business growth. There was a total gross addition of 20,350 people (net addition of 8,326 employees) taking the total employee strength of 313,757 employees on a consolidated basis. The utilization rate (excluding trainees) was at 86.2% and that including trainees was 81.3%. The attrition rate (LTM) was at 12.8% per cent including BPS.

 

During the quarter, the company crossed the milestone of employing 100,000 women professionals with a gender diversity ratio of 32.9%.

 

Diversity of talent remains a key source of strength for the organization and during the quarter, we crossed the milestone of having 100,000 women professionals in our workforce,” said Ajoy Mukherjee, Executive vice president and Global Head, Human Resources. “Our hiring plan for FY15 is on track as we continue to build a talent pipeline in line with business demands.”

 

Awards and Recognition:

 

Business Leadership:

  • World's 100 Most Innovative Companies - Forbes

 

  • Company of the Year – The Economic Times

 

  • Six awards at Asia's Best Employer Brand Awards 2014, Singapore:

 

o BPO Organisation of the Year

o Talent Management

o Innovation in Recruitment

o Excellence in Training

o Best HR Strategy in Line With Business

o Operational Excellence & Quality in the BPO Industry

 

  • Indian Multinational of the Year award - AIMA Managing India Awards 2014

 

  • Best Technology Provider - Reactions (North America)

 

  • Multiple awards at Asian Telecom Leadership Awards 2014

 

o Best Telecom Software

o Best Value Added Services Providers

o Best General Social Initiative Award for mKrishi

 

  • Ranked among Top 10 global service providers in China

 

 

Partner:

  • Multiple awards at the CA Technologies Partner Summit :

 

o FY14 Country Partner of the Year

o Partner of the Year - Security solutions

o Public Sector Partner of the Year

 

  • Oracle Excellence Awards

 

o Global System Integrator Customer Experience (CX) Applications

o Specialised Partner of the Year

 

Sustainability:

  • Global Leader in sustainability - Dow Jones Sustainability World Index 2014

 

  • Ranked Number One of Top 100 Companies in Asia in Sustainability Ranking

 

 

Leadership:

 

N Chandrasekaran:

  • Voted Best CEO in the Institutional Investor's 2014 Annual All-Asia Executive Team Rankings

 

 

                                           Unaudited Condensed Consolidated Statements of Comprehensive Income

For the three-month periods ended September 30, 2013, June 30, 2014 and September 30, 2014

(In millions of `, except per share data)

 

 

Three-month period ended September 30, 2013

Three-month period ended June 30,

2014

Three-month period ended September 30, 2014

 Revenue

209,772

221,110

238,165

 Cost of revenue

109,048

122,432

132,405

 Gross margin

100,724

98,678

105,760

 SG & A expenses

37,429

40,529

41,818

 Operating income

63,295

58,149

63,942

 Other income (expense), net

(906)

8,151

5,659

 Income before income taxes

62,389

66,300

69,601

 Income taxes

15,563

15,312

16,045

 Income after income taxes

46,826

50,988

53,556

 Minority interest

287

410

673

 Net income

46,539

50,578

52,883

 Earnings per share in `

23.76

25.82

27.00

 

 

 

Unaudited Condensed Consolidated Statements of Financial Position

As of March 31, 2014 and September 30, 2014

(In millions of `)

 

 

As of March 31, 2014

As of September 30, 2014

Assets

Property and equipment

103,644

111,593

 Intangible assets and Goodwill

41,568

40,570

 Accounts Receivable

182,304

199,084

 Unbilled Revenues

40,056

45,499

 Investments

34,617

6,847

 Cash and Cash equivalents

14,688

14,247

 Other current assets

180,934

167,378

 Other non current assets

91,314

76,394

Total Assets

689,125

661,612

Liabilities and Shareholders' Equity

Shareholders' Funds

553,355

507,152

Long term borrowings

1,273

1,410

Short term borrowings

1,696

1,247

Other current liabilities

109,055

124,341

Other non-current liabilities

16,844

19,152

Minority Interest

6,902

8,310

 Total Liabilities

689,125

661,612

 

 

Media contact:

Aditya Singh / Manpreet Singh

+91 8130599192 /+91 9810286337

E: [email protected] / [email protected]

 


 
 
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