TCS delivers growth, maintains operating margins in Q1; Revenues at $1.5b, up 21% Y-o-Y
- Net Income at $ 296 million up 2% Y-o-Y
- Major markets – US, UK, Europe - grow at 2.2% Q-o-Q
- Cash and Liquid Investments cross $ 1 billion
- Pro-active cost control program to maintain operating margins
- New vertical organisation structure drives full services play
Mumbai, July 16, 2008: Tata Consultancy Services (BSE: TCS.BO, NSE: TCS.NS) reported its consolidated US GAAP financial results for the first quarter ended June 30, 2008.
Highlights for Quarter Ended June 30, 2008 (US GAAP)
- EPS at $ 0.30
- 35 new clients added
- 8,982 employees joined the company
- Attrition at 12.8% LTM (including BPO)
- Dividend of Rs 3 per share announced
Chief Executive Officer and Managing Director, S. Ramadorai said: “We have been able to respond to the challenging macro environment and drive growth in the business under tough operating conditions and manage costs. TCS is cautiously optimistic about the rest of the year.
Chief Financial Officer and Executive Director, S. Mahalingam said: “TCS is focused on extracting greater operational efficiencies through rigorous cost management programs. This has helped us hold operating margins steady in Q1 despite the impact of the annual wage increases during this quarter.”
“Major markets, North America, UK and Europe grew at eight per cent despite a challenging external scenario,” said N. Chandrasekaran, Chief Operating Officer and Executive Director. “Traction in the manufacturing, life sciences and retail verticals has helped drive growth in Q1. Our diversified business mix, portfolio of offerings and blue-chip clients across sectors places us in good position to deliver growth on our large base in the coming quarters.”
Full services play continued to get traction with key service lines including ADM, Infrastructure and Assurance services contributing to growth in this quarter. TCS’ Engineering and Industrial Services along with IT services is enabling TCS to provide a total full services offering to clients in Manufacturing and Hi-Tech verticals, while the Global Consulting Practice is actively engaged by customers for IT optimization and overall IT strategy and governance related engagements. TCS’ Platform-based BPO in HRO is beginning to gain traction with many global customers.
“Our retention rates for employees continue to be the highest in the industry and we remain on course with our hiring plans for this financial year. We are also working to increase the productivity and utilization rates of our employees,” said Ajoy Mukherjee, Vice President, Head, Global Human Resources.
TCS’ attrition rate in Q1 was 12.8% overall with 12.1% attrition rate in the IT services business and 20.5% attrition rate in BPO.
At the end of Q1, the total employee strength of the company was 116,308, from 64 nationalities. Foreign nationals formed 9.2% of the total employee base and 29% were women.
Utilization in Q1 FY09 was 78.3% (excluding trainees) & 74.6% (including trainees). There was a gross addition of 8,982 employees of which 4,495 were trainees and 2,905 were experienced professionals in India and 1,582 employees in overseas subsidiaries and branches in Q1. The net addition was 4,895 employees.
About Tata Consultancy Services:
Tata Consultancy Services is an IT services, business solutions and outsourcing organization that delivers real results to global businesses, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled services delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development. A part of the Tata Group, India’s largest industrial conglomerate, TCS has over 116,000 of the world's best trained IT consultants in 50 countries. The company generated consolidated revenues of US $5.7 billion for fiscal year ended 31 March 2008 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at www.tcs.com.
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