Tata Consultancy Services, India's largest IT company, has reported a rise of 10 per cent in its net profit quarter-on-quarter for the second quarter ended September 2005 to Rs 693.71 crore (Rs 6.937 billion).
- The IT major also posted revenues of Rs 2,982.60 crore (Rs 29.826 billion) for Q2, up 10.2 per cent q-on-q.
- The company's half-yearly revenues stood at $1.30 billion. TCS also won two $250 million deals during the quarter.
- The earnings per share in Q2 stand at Rs 14.45, up from Rs 13.13 in Q1.
- The IT major added as many as 74 new clients during the second quarter.
- TCS hired 5,596 employees during the period under review. In the process, the IT giant has become the first Indian IT company to hire move than 50,000 employees.
The company had recently been ranked as the best IT employer in the country by DataQuest magazine.
TCS has also announced a second interim dividend of Rs 3 per share for the second quarter.
Commenting on the company's performance in Q2, TCS CEO S Ramadorai said in a statement: "The significant client acquisitions we have had in the previous quarters have resulted in excellent ramp-up and growth during Q2. TCS' global delivery and consulting-led growth strategy has gained full market validation with the number of significant wins we have had this quarter. Our ability to manage complex technology engagements on a global scale will continue to be a growth driver."
Big wins
- A $250m + global engagement with ABN AMRO set the new benchmark for outsourcing deals to India. The pioneering efforts of TCS' Global Delivery Model again came to fruition.
- In India, Tata Teleservices outsourced IT operations and applications to TCS in a contract worth $250m
- A leading US Retailer selected TCS as its strategic IT partner on a multi-year contract.
- Two large US insurance providers selected TCS as their strategic partner during the quarter.
- A leading global bank selected TCS as its partner in Latin America in a multi-year, multi-million dollar deal.
- One of the largest engineering, construction and oil-field services company selected TCS for providing state-of-the-art GIS solutions.
Capturing value
The company continued its client acquisition and growth momentum across all its service segments.
- TCS' differentiated platform-based BPO strategy continued to witness strong traction and the practice added 8 new clients in transaction processing during Q2 across Banking, Retail and, Pharma verticals. Three existing clients ramped up operation and added sizable additional associates during Q2. The BPO business had 2312 Employees at the end of Q2. A new BPO centre in Chennai became operational during the quarter with a capacity of over 1,000 seats.
Significant BPO deals include:
- A leading US retailer selected TCS for its analytics process.
- A major European bank selected TCS for its fixed-income process.
- A leading US semiconductor equipment company selected TCS for supply chain processes.
- TCS' Asset Leveraged Solutions are offering great value to clients.
- TCS' products in banking, insurance and capital markets achieved critical wins during Q2.
Significant product deals include:
- TCS' benchmark Insurance product IIMS was selected by a global insurance company for its China and Korean subsidiaries and will form the platform for the client's next generation solutions for group and individual life products.
- A leading investment bank and brokerage house in Chile selected Quartz as its platform.
- Anti-money laundering solution finDNA was selected by two major US financial institutions.
- TCS' eClearSettle was selected by the National Depository Centre in Moscow.
The company continues to leverage its strong client base in the manufacturing segment to move successfully into Engineering and Industrial Services (EIS), which added 18 new clients during Q2.
Significant EIS deals include:
- Engineering CAM solutions for a leading UK aerospace company.
- Implementing its product lifecycle management (PLM) strategy for the world's leading home and business audio systems company.
- A large producer of semiconductor equipments in North America chose TCS as its EIS partner.
- The remote infrastructure management services continued to grow in strength and added 18 new clients during Q2, taking the total number of active clients to 102 at the end of Q2.
Significant remote infrastructure management deals include:
- A leading North American Bank chose TCS as its strategic partner for a host of services including server consolidation, performance management, network monitoring and data centre management.
- A leading UK-based global insurance company has engaged TCS for providing security and access management services.
- TCS will provide end-to-end infrastructure management and services for Tata Teleservices.
- TCS' assurance services won 6 new clients during Q2 with its new testing centre of excellence gaining acceptance from large customers. At the end of Q2, it had 64 active customers.
Significant assurance services deals include:
- Business acceptance testing for a leading financial services company in Europe end-to-end test automation for a leading telecom equipment manufacturer in North America.
- Enterprise testing strategy development for a leading manufacturing company in Asia Pacific.
Delivering value
- TCS' core banking solution at State Bank of India has been successfully implemented in over 5,000+ branches. Two State Bank subsidiaries -- State Bank of Patiala and State Bank of Travancore -- are fully under the core banking solution.
- The core banking implementation at Indian Bank crossed the 100 branches mark during the quarter.
- TCS successfully implemented its depository and clearing solution eClearSettle for a Middle-Eastern financial exchange. This is considered as an international benchmark for end-to-end deployment timeline.
- TCS successfully implemented an end-to-end business transformation programme for a leading Insurance company in North America.
- TCS defined and implemented a data warehouse architecture to achieve process intelligence for a Pharma major in the US.
- For a leading retail research company, TCS BPO delivers 300,000 reports every month with an accuracy of 99.98%.
- TCS' EIS practice implemented an e-matrix based solution for a large medical equipment manufacturer to achieve FDA compliance in their manufacturing and supply chain processes.
Human resources update
There was a gross addition of 5,596 employees and net addition of 4,224 employees. TCS' attrition rate was 8.7% for the last 12 months, the lowest in the Indian IT industry. TCS was named best IT employer for the year 2005 by DataQuest.
At the end of Q2, the total employee strength of the company was 53, 329, with employees coming from 49 different nationalities. The strength of non-Indian nationals increased to 3.9% of the total employee base from 3.7% at the end of Q1. 53% of TCS employees have more than 3 years of experience and 23% are women employees.