Strategic investments in new services and new markets helped India's largest IT services provider, Tata Consultancy Services (TCS), beat the rupee appreciation against foreign currencies - and hence market expectations - to post a consolidated revenue of Rs 5,640 crore (Rs 56.40 billion) in the second quarter ended September 30, 2007.
The Indian GAAP (Generally Accepted Accounting Principles) figure was up 25.4 per cent (Y-o-Y) when compared to last year's revenue figure of Rs 4,495 crore (Rs 44.95 billion) during the same period.
The company's net profit touched Rs 1,252 crore (Rs 12.52 billion) this quarter, a jump of 22.8 per cent when compared to last year's figure of Rs 1,019 crore (Rs 10.19 billion) for the same period.
Sequentially (when compared with the previous quarter's figures), TCS' revenue grew 8.4 per cent in rupee terms (10.8 per cent in dollar terms), while its net profit increased by 4.1 per cent in rupee terms (and 6.3 per cent in dollar terms).
The Mumbai-based company has become the first India-based IT firm to cross the landmark of 100,000 employees. It added 9,268 (net) employees this quarter.
Chief executive officer and managing director, S. Ramadorai, said: "Our strategic investments in new services like consulting, infrastructure and platform-based BPO as well as new markets are helping us accelerate growth and diversify our revenue base, thereby reinforcing our full services capability."
Over 50 per cent of its second quarter revenues came from new services - i.e. services other than the traditionally-strong application, development and maintenance (ADM) services.
S Mahalingam, chief financial officer, said: "Our focus remains on twin pillars of growth and profitability. We remain confident that our hedging programme (outstanding forex cover is $2.6 billion) and cost management levers will help us expand margins during the rest of the year."
In dollar terms, TCS revenues grew by 10.8 per cent, driven by strong growth in the banking and financial services, telecom and manufacturing verticals, which grew faster than the average company growth rate. Travel and hospitality is also fast emerging as a key vertical contributing 4.4 per cent of revenues, up from 2.8 per cent in the previous quarter as a result of significant client additions.
"We remain on target to meet our annual hiring plans and have added over 12,000 employees (gross) this quarter," said S Padmanabhan, executive director, human resources.
The net addition of employees was 9,268. TCS also added 966 employees in overseas subsidiaries and branches.
TCS' attrition rate remained steady at 11.5 per cent overall with 10.9 per cent attrition rate in the IT services business and 17.9 per cent attrition rate in the BPO.
Foreign nationals formed 8.5 per cent of the total employee base and 28 per cent were women.
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