Natarajan Chandrasekaran, CEO and managing director, Tata Consultancy Services
India’s largest exporter of software services Tata Consultancy Services (TCS), on Monday, recorded a 1.5 percent sequential growth in dollar revenue during the January to March quarter, marginally behind rival Infosys’s 1.6 percent growth during the same period.
For the full year ended March 31, TCS posted a 7.1 percent growth in dollar revenue failing to match Infosys’s 9.1 percent rise in FY16.
TCS’s revenue (in dollar terms) in the March quarter grew by 7.9 percent year-on-year (y-on-y) to $4.2 billion, while its profit stood at $938 million, up 50.9 percent y-o-y and 1.3 percent sequentially. Bengaluru-based Infosys had posted a profit of $533 million, up 1.7 percent sequentially and 7 percent y-o-y during the three-month period.
However, during the fourth quarter, TCS posted a 2.1 percent rise in sequential dollar revenue growth in constant currency terms, ahead of India’s second-largest IT-services firm Infosys, which posted a 1.9 percent jump in the same quarter. For companies with large foreign operations, constant currency growth is seen as an indicator of real growth. IT firms use this method to eliminate the effects of exchange rate fluctuations while calculating financial results.
“Our core portfolio performed strongly in a seasonally weak fourth quarter driven by strong volumes led by growth in BFSI, retail and manufacturing sectors. This gives us good momentum going into the new financial year. Our investments in building high impact digital platforms is paying off, resulting in over $2.3 billion in digital revenues,” said N Chandrasekaran, CEO and managing director, TCS.
For the full year ended March 31, TCS recorded a revenue of $16.54 billion, while net profit for FY16 stood at $3.69 billion.
In rupee terms, TCS reported a net profit of Rs 6,341 crore in the quarter ended March. On a sequential basis, the company’s profit rose 3.8 percent. Its revenue during the period stood at Rs 28,449 crore, up by 4 percent quarter-on-quarter. During the same period, Infosys’s net profit (in rupee terms) stood at Rs 3,597 crore, up 3.8 percent sequentially, while revenue rose by 4.1 percent to Rs 16,550 crore.
Rajesh Gopinathan, Chief Financial Officer, said: “In FY16, we have balanced our focus on delivering an industry leading financial performance with our ongoing investment program designed to capture evolving digital demand. We have invested over $250M to support organic growth in our Digital businesses and in new markets, while maintaining our profitability within our desired range and generated strong operating cash flows as well.”
Besides, TCS announced a total dividend of Rs 43.5 per equity share, which included Rs 27 per share proposed final dividend during the fourth quarter of FY16.
In the quarter under review TCS clocked a net addition of 9,152 employees, taking its total workforce to 353,843 employees. Fiscal 2015-16 had a net addition of 34,187 employees. “TCS completed its highest ever hiring of over 90,000 new employees globally during the year. We are also delighted that our employee retention continues to increase as we continue to invest in building digital skills of TCSers to help them participate extensively in the new digital economy.” said Ajoy Mukherjee, executive vice president and global head, Human Resources.
On Friday, the Wisconsin federal jury ordered TCS to pay $940 million in an intellectual property (IP) infringement case. US-based Epic Systems Corp, an electronic medical records vendor, alleged TCS of stealing its “trade secrets, confidential information, documents and data.”
The Verona-based Epic Systems had filed a lawsuit against the Mumbai-headquartered IT major and its US subsidiary, Tata America International, in the US district court in Madison.
However, in a release issued by TCS on Saturday it said: “The Company did not misuse or derive any benefit from downloaded documents from Epic System’s user-web portal. TCS plans to defend its position vigorously in appeals to higher courts.”
Shares of TCS closed at Rs 2522.40 a piece, marginally down 0.03 percent on the Bombay Stock Exchange before the earnings announcement on Monday. The sensitive index, Sensex, ended the day marginally up by 0.74 percent.