TCS net up 45% in Q1 beating street estimates
Jul 17 2014 , Mumbai
During the quarter, the company also benefited to the extent of Rs 489.7 crore due to change in the depreciation policy and Rs 239.7 crore on forex gains.
Revenue for the quarter was up 23 per cent to Rs 22,111 crore.
TCS reported more than 5 per cent growth in all the sectors it operates in except insurance, which proved to be a laggard. The lucrative sectors were media and information, financial services, telecom, tourism and healthcare.
N Chandrasekaran, CEO and MD of TCS said, “The growth was led by north America and was followed by UK, India and the European region.”
He added, “With the improved climate in India and elsewhere, we expect the momentum to continue in the coming quarters as well.”
The firm also managed to surprise analysts on the margin front. Despite a wage hike of 10 per cent, an appreciating rupee and a one-time impact due to depreciation policy, operating margins were at 26.3 per cent. “We have a strong demand pipeline in place. Our focus on digital space and strong execution capabilities will help us to sustain our momentum.
This quarter we have signed seven large deals spread across six verticals. Five of them are above $50 million contracts,” said Chandrasekaran. The firm also posted the highest incremental revenue of $191 million in the last 15 quarters.
Rajesh Gopinathan, chief financial officer, said: “We managed to mitigate the headwinds like currency fluctuations, wage hikes and new depreciation norms through focus on efficient operations during the quarter.” TCS hired a total of 15,817 employees during the quarter with a net hiring of 4,967 employees. It maintained its full year hiring guidance of 55,000. Utilisation for the quarter was at an all-time high at 85.3 per cent. “Our focus on productivity continues to yield results, with utilisation rates at an all-time high of over 85 per cent. We have already started on-boarding the campus trainees this
year with 3,000 already hired during the quarter. The rest will join in coming quarters,” said Ajoy Mukherjee, executive vice president and global head, human resources.
The company has also informed employees that they would be paid complete variable pay for the first quarter of the year.
In a written communiqué to staff, Mukerjee said, “I am pleased to announce the management decision to pay 100 per cent of the variable component for the quarter ended June 30, 2014. All employees up to ITA (C2) or equivalent grades will get 100 per cent of their potential variable for Q1. For senior grades (C3A or equivalent grade and above), the total payout across the company would be 100 per cent and the distribution at employee level would vary depending on their business unit performance. The QVA payout is applicable to all eligible employees on India payroll covered under this scheme and the payout will be reflected in the August payroll,” Mukherjee wrote.
(with inputs from S Shyamala in Chennai)