Total Revenues at $975 million up 42% Y-on-Y
Net Income at $216 million up 44% Y-on-Y
Operating margins jump 294 basis points in Q2
MUMBAI, October 16, 2006: Tata Consultancy Services (BSE: TCS.BO, NSE: TCS.NS) reported its consolidated financial results according to US GAAP for the quarter ended September 30, 2006.
Highlights for Quarter Ended September 30, 2006
Total Revenues at $975.43 million up by 8.15% Q-on-Q
Net Income at $215.78 million up by 14.95% Q-on-Q
EPS up from Rs 8.81 in Q1 to Rs. 10.13 ($ 0.22 ) in Q2
58 new clients added in Q2
8,919 employees joined the company in Q2
Dividend of Rs 3 per share announced
Commenting on Q2 performance, CEO and MD of TCS, S. Ramadorai said: "TCS had a dynamic quarter with a continuous focus on profitable growth, driven by strong international demand, an increasing number of large customers as well as a healthy addition of 58 new accounts. There is tremendous scope to continue to increase our share of wallet with our top 50 customers using our full-services model."
S. Mahalingam, Chief Financial Officer, said: "In a strong demand environment, we have improved our margins by almost 300 basis points by ensuring revenue growth matches with our profitability benchmarks. Moreover, margins have been boosted as large contracts announced earlier have transitioned into the off-shore mode."
"The company's integrated full-services model, including Business Intelligence, Consulting, Infrastructure and Assurance services, is driving growth with large customers leading to a 50% jump in the number of customers with over $50 million in annual revenues to 15 during Q2," said N. Chandrasekaran, global head of sales and operations.
TCS added 58 new customers and increased its customers in the one million-dollar band from 258 to 274. Its global Network Delivery Model™ is being rapidly adopted by global customers. Global Development Centers in Brazil, China, Uruguay and Hungary are gaining scale with the Brazilian GDC crossing the 1,000-employee mark during Q2.
Human Resources Update:
"We continue to be the employer of choice in this industry with the best retention rate and this is helping us execute on the ground globally," said S. Padmanabhan, global head of human resources.
There was a gross addition of 8,919 (net 6,663) employees during the 2nd quarter. In India, there were 3,764 were campus hires and 4,200 lateral hires. TCS continued to maintain the lowest attrition rate in the industry at 10.6%, including BPO (10.6% in Q1).
At the end of Q2, the total employee strength of the company was 78,028, with employees coming from 60 different nationalities. Non-Indian nationals formed 8.3% (7.3% in Q1) of the total employee base and 25% were women. 11,250 offers were made on campuses to suitable candidates for FY08.
Big Wins
A premier aerospace company selected TCS' Engineering services to design interiors for its new passenger aircraft
A leading UK media and entertainment company selected TCS as a Systems Integration partner for key business segments including content management, digital delivery and wholesale line rentals
A leading European pharmaceutical firm selected TCS as an end-to-end Assurance services partner
TCS established three assurance services centers for existing US customers for conducting end-to-end testing services
TCS is rolling out a SAP solution for a leading oil and gas company throughout EMEA
An European financial services regulator selected TCS as its partner for its transformation program
A leading North American Insurance player awarded TCS a multi-million dollar Business Intelligence outsourcing deal
An European financial institution selected TCS to deliver a Service Oriented Architecture (SOA) platform for its investment division
A leading UK energy and utilities player partnered with TCS' Infrastructure practice for a technology refresh and consolidation program
A leading European mobile phone maker chose TCS to implement a comprehensive CRM program
About Tata Consultancy Services Ltd (TCS)
Tata Consultancy Services Limited (TCS) is the world leading information technology consulting, services, business process outsourcing and engineering services organization that envisioned and pioneered the adoption of the flexible global business practices that today enable companies to operate more efficiently and produce more value. TCS achieved this by creating and perfecting a unique method of global deployment and delivery of high quality, high value services and products in IT consulting and business process outsourcing. Known as the "Global Delivery Model," this strategic services delivery concept has reshaped the IT services industry.
More than 95% of TCS customers reward the company's reliability, passion, creativity, and unique ability to handle the broadest range of their IT needs by continually extending and deepening their partnerships with TCS. With over 70,000 of the world's best trained IT consultants located in 34 countries, TCS is uniquely positioned to deliver its flexible world class services seamlessly to any location. TCS reported consolidated revenues of $2.97 billion (U.S.) in the fiscal year 2005-2006. The company is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information: www.tcs.com
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