Tata Consultancy Services, India's leading IT services, business solutions and outsourcing firm, reported its consolidated financial results according to US GAAP for the quarter and financial year ended March 31, 2007.
Highlights of 2006-07
Strong Growth momentum continues
- Total Revenues for 2006-07 at Rs 18,685 crore ($4.3 billion); up 41 % Y-on-Y
- Net Income for 2006-07 at Rs 4,213 crore ($969 million); up 42 % Y-on-Y
- EPS for 2006-07 at Rs 43.05 from Rs 30.32 in 2005-06
- Total Dividend for FY07 at Rs 11.50 per share, including proposed Rs 4 final dividend
Robust full services model
- 12 deals of $50m-plus closed during 2006-07
- Hi-growth services like BPO, assurance, infrastructure and consulting reach critical mass; comprise 18% of total revenues up from 10% in 2005-06
- Customer additions during 2006-07: 218
Growing Global Footprint
- TCS North America revenues cross $2 billion
- TCS Europe revenues cross $1 billion
- TCS Latin America revenues rise over 100% to $ 159 million
- New Development Center planned in Morocco. Mexico, Brazil, China GDCs to ramp up
Human Resource Update
- Lowest attrition rate in the industry at 11.3% LTM (including BPO)
- Global workforce: 9.6% of employees are overseas nationals
- 12,000+ campus offers made to trainees joining in 2007-08
Highlights for Quarter Ended March 31, 2007
- Total revenues at Rs 5,162 crore ($1.2 billion) up 6% Q-on-Q
- Net profit at Rs 1,195 crore ($275 million) up 7% Q-on-Q
- EPS up from Rs. 11.40 in Q3 to Rs. 12.21 in Q4
- 43 new clients added in Q4
- 5,827 associates added in Q4
- Closed two $50 million-plus deals and one $35 million deal in Q4
Commenting on another stand-out year for TCS, S. Ramadorai, CEO and MD said: "TCS's robust business model using our full-services play and global network delivery model has given us the pole position to capitalise from the strong demand environment that exists globally."
Ramadorai added: "Our emerging hi-growth services are giving the company a superior quality of revenue and a diversified customer base across markets and verticals. The significant number of large wins in FY07 that will ramp up during the next fiscal year makes us confident of continuing sustained, profitable growth."
Commenting on the strong financial performance against the backdrop of currency volatility, S Mahalingam, chief financial officer, said: "To achieve over $4 billion in revenues in FY07 and over a billion dollars in operating income, we have exercised several levers in terms of pricing, off-shore leverage and cost controls to strengthen profit margins despite a fluctuating rupee."
Mahalingam added: "With an agile hedging strategy and platforms for cost controls in place, TCS is confident of delivering growth with profitability in the coming quarters."
Delivery certainty to customers
Hi-growth service lines like infrastructure, consulting, business intelligence and assurance services grew by more than 100 per cent in 2006-07 and now contribute 18% to TCS revenues. This is helping the company to maximize its revenues in an environment of strong international demand. Of the 12 deals of over $50-million closed in 2006-07, five deals involved the full-services play with customers using more than one service offering of the company.
Commenting on the deal pipeline and the demand scenario, N Chandrasekaran, head, global sales and operations said: "The TCS operations engine continues to deliver certainty to customers. "Our full-services play continues to score at an impressive run-rate and this is translating into a very healthy pipeline leading to growth across services and domains, in mature and emerging markets. Chandrasekaran added: "Last year's large wins are ramping up as planned".
To further strengthen its market position globally and communicate its strengths to customers, TCS launched the first ever global branding and marketing campaign by an Indian corporation during Q4 called 'experience certainty.'
"Our brand proposition for the customer centre around the experience of certainty -- certainty that technology will always enable their business to focus on their customers," said Phiroz Vandrevala, head, global corporate affairs.
"The TCS brand campaign is about communication these experiences that the biggest global corporations have had with us and the certainty we have delivered to their business to the global market."
Human resources update:
There was a gross addition of 32,462 (net 22,750) employees during the 2006-07. In Q4, the gross addition was 8,613 (net 5,827). TCS continued to maintain the lowest attrition rate in the industry at 11.3%. At the end of Q4 2006-07, the total employee strength of the company was 89,419 professionals. Overseas nationals formed 9.6% (8.8% in Q3) of the total employee base with employees coming from 67 different nationalities. 26% of all employees are women.
"We have delivered on retention with the lowest attrition rate in the industry in an environment of intense competition for talent. TCS' global recruitment and training engine has also evolved and matured to meet growing manpower needs of our business," said S. Padmanabhan, head, global human resources. "Our efforts to build a global pool of professionals are bearing fruit with almost 10% of TCSers now overseas nationals."
