TCS reports 13% net rise, merges CMC with itself
India’s largest IT services company, Tata Consultancy Service (TCS), on Thursday reported a 13.2% year-on-year rise in net profit to Rs 5,244 crore during the second quarter on robust deal flow and high utilisation. Revnue rose 13.5% to Rs 23,816 crore.business Updated: Oct 17, 2014 00:28 IST
India’s largest IT services company, Tata Consultancy Service (TCS), on Thursday reported a 13.2% year-on-year rise in net profit to Rs 5,244 crore during the second quarter on robust deal flow and high utilisation. Revnue rose 13.5% to Rs 23,816 crore.
The numbers were, however, slightly below analysts’ expectations of Rs 5,384-crore profit.
TCS’s competitor Infosys had reported a 3% growth in revenue and a 29% growth in net profit last week. TCS’s attrition went up to 12.8%, though it remains much lower than that of Infosys which faces over 20% attrition.
N Chandrasekharan, CEO and MD, TCS, said the growth was broad-based across key markets, industries and services.
TCS added four $50-million- plus revenue clients and nine $20-million-plus revenue clients, raised utilisation rate to 81.3% from 79.2% in the previous quarter and added 8,326 employees during the quarter under review.
“We had 8 large deal wins — two in banking and finance, two in manufacturing and one each in four other verticals,” Chandrashekaran said. All geographies, including key markets US and Europe, showed growth while Latin America showed slight de-growth.
About Indian market he said: “Last quarter we saw growth in India market. We have now seen second consecutive quarter of growth. We feel India is back to growth again.”
TCS also announced the merger of its subsidiary CMC Ltd with itself. TCS holds 51.12% stake in CMC. All CMC shareholders will get 79 equity shares of Rs 1 each of TCS for 100 equity shares of Rs 10 each of CMC. CMC reported Rs 616.68 crore revenue and Rs 76 crore net profit for the second quarter and has 11,000 employees.
CMC was incorporated on December 26, 1975 as Computer Management Corp Pvt Ltd in which the government held 100% stake. It was converted into a public limited company in August 1977 and was privatised in October 2001 in a sale to TCS.