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TCS delivers steady performance in Q3, maintains industry-leading momentum

Revenues at $3.93 billion; up 14.3% Y-o-Y

  • Constant currency revenue growth of 2.5%
  • Significant addition of customers across all revenue bands
  • Net Income at $ 873 million up 4.4% Y-o-Y

MUMBAI, January 15, 2015: Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading IT services, consulting and  business solutions firm reported its consolidated financial results according to IFRS US Dollars for the quarter ended December 31, 2014.

Financial Highlights for Quarter Ended December 31, 2014

  • Operating Profit at $ 1,063 million up 3.9 % Y-o-Y

Business Highlights for Quarter Ended December 31, 2014

  • Gross employee addition: 16,561
  • Total headcount: 318,625
  • Utilization: 86.7% (excluding trainees) & 82.1% (including trainees)
  • No of $100m+ clients increases by 1; No of $50m+ clients increase by 3; No of $5M+ clients increase by 20

Commenting on the Q3 performance, Chief Executive Officer and Managing Director, N Chandrasekaran said: “We have maintained our momentum in a traditionally weak quarter for the IT industry. In constant currency terms, we have seen significant growth in USA, Europe as well as emerging markets like Latin America and Middle-East Africa. Our diversified industry portfolio and presence across key markets have helped us overcome soft seasonal demand in some sectors.”

Mr Chandrasekaran added: “Based on our progress this quarter, we are well on our way to post industry-leading growth for FY15. In areas like Digital, Simplification and Governance, we continue to partner closely with customers to help them prepare their businesses to succeed in an economy where the default is digital.”

Rajesh Gopinathan, Chief Financial Officer, said: “Sharp cross currency movements have impacted dollar revenues, but we continue to manage operations with discipline and rigour while investing in people, capabilities and infrastructure on an ongoing basis.

Growth in Q3 was driven by industries like Telecom, Hi Tech and Life Sciences. Europe led growth, driven by the investments made in that market, while North America also grew during the quarter. Among emerging markets, Latin America and MEA registered strong growth. Among service lines, Global Consulting, Asset Leveraged Solutions, Infrastructure Services and Assurance Services were the leaders.

Select Key Wins

  • Selected by a leading beverages company to manage and build a private Cloud for their global Infrastructure operations
  • Chosen as preferred technology partner by a leading British mutual financial institution to manage their applications portfolio
  • Chosen as the Strategic Partner by a leading pharmaceutical & healthcare company for deployment of their SAP transformation initiative globally
  • Selected by a large Indian Financial Institution to implement full service digital banking using TCS BaNCS
  • Engaged by a leading European airline to manage its business integration platform that will transform the way the airline will operate in the future
  • Selected as a strategic partner by one of North America’s leading property and casualty insurers to modernize, rationalize and simplify its application portfolio that supports several of its business capabilities
  • Selected by one of the largest banks in Latin America as its strategic partner for its payment digitization and regulatory compliance initiative

Key Wins in Digital Services and Solutions

  • Selected by a leading UK based bank to build a collaborative social platform allowing integration of internal and customer provided data and to derive inferences using Artificial Intelligence
  • Won an engagement from a leading insurance company to increase awareness of their employees around risks and reduce claims using social learning and gamification
  • Selected by one of the largest power generation and water equipment companies to provide consulting services to accelerate their Cloud adoption and maturity
  • Engaged by an American financial services group for transform enterprise infrastructure to an application programming interface based model to enable easy adaptability for rapidly changing consumer needs
  • Won a multi-million dollar multi-year engagement from a global Hi-Tech firm to manage its Big Data and Mobility program landscape
  • Chosen by a leading European airlines as a preferred partner for their customer experience lab to provide multi-channel customer experience, personalization and targeted marketing
  • Selected by a leading Australian financial services provider to enable hyper connected social collaboration using the TCS Knome™ product
  • Engaged by a leading North American Bank to augment their Centre of Excellence for Creative Design
  • Selected by global retailer for enabling unified view of customer analytics across multiple channels
  • Selected by a leading UK based banking customer as their prime mobility and user experience partner to build next generation consumer mobile applications
  • Chosen by a leading bank to build a Big Data hub based on Hadoop to simplify their cards interchange solution

Innovation and Intellectual Property:

  • As of December 31, 2014, the company has applied for 2081 patents including 121 applied during the quarter. Till date, the company has been granted 175 patents

Human Resources:

The company continued to hire to support business growth. There was a total gross addition of 16,561 people (net addition of 4,868 employees) taking the total employee strength to 318,625 employees on a consolidated basis. The utilization rate (excluding trainees) was at 86.7% and that including trainees was 82.1 %. The attrition rate (LTM) was at 13.4 %.

“Our efforts to push the bar on utilization continues with the rate crossing 86% without trainees and 82% with trainees. Our hiring continues to support strong business growth, we are likely to exceed our hiring target for the current financial year,” said Ajoy MukherjeeExecutive vice president and Global Head, Human Resources.

Awards and Recognition:

Business Leadership:

  • ‘Company of the Year’  at Economic Times Awards 2014
  • Top Workforce honor at the 2014 Diversity and Inclusion (DANDI) awards held in New York
  • Excellence in Information Security in the IT Service (Large) by the Data Security Council of India (DSCI)
  • Honored for outstanding contribution to the Germany-India economic relationship
  • Australian Service Excellence award
  • Gold Stevie winner for ‘Best Human Resources Department of the Year’ at the 2014 International Business Awards (IBA)
  • TCS UK & Ireland won the Corporate Responsibility Award of the Year’ for its IT Futures Programme at the 8th Annual HR Network National Awards 2014.
  • TCS UK recognized for investment in talent and HR excellence
    • Achieves Gold level recertification from Investors in People
    • Wins ‘Best Rewards and Benefits Initiative’ category at Chartered Institute of Personnel and Development (CIPD) Awards
  • TCS BaNCS won Global Custodian award for Best Custody second time in a row
  • India's 'Top Telecom Software, Solutions & Consulting Company Award' for 2014 at XXI ICT Business Awards
  • 'Best Use of Technology' honor at the Canadian HR Awards
  • ‘Export Excellence Award – IT & ITES’ by Cochin Special Economic Zone

Partner:

  • Won three awards from Hitachi Data Systems (HDS) APAC GSI Summit 2014
  • Won the 2014 Oracle Excellence Award for ‘Specialised Partner of the Year – Middle East’
  • Won the ‘Best Supplier for Indirect Services’ from NXP Semiconductors
  • Named the Leading Vendor Award for Quality Assurance(QA) and Testing services at TESTA 2014  services

Sustainability:

Leadership:

N Chandrasekaran:
Won the Best CEO award and also Best CEO of IT & ITES - Large Companies by Business Today

Unaudited Condensed Consolidated Statements of Comprehensive Income
For the three-month periods ended December 31, 2013, September 30, 2014 and December 31, 2014
(In millions of USD, except per share data)

 

Three-month period ended December 
31, 2013

Three-month period ended September 30, 2014

Three-month period ended December 
31, 2014

 Revenue

3,438

3,929

3,931

 Cost of revenue

1,780

2,184

2,168

 Gross margin

1,658

1,745

1,763

 SG & A expenses

635

690

700

 Operating income

1,023

1,055

1,063

 Other income (expense), net

87

93

101

 Income before income taxes

1,110

1,148

1,164

 Income taxes

267

265

280

 Income after income taxes

843

883

884

 Minority interest

7

11

11

 Net income

836

872

873

 Earnings per share in USD

0.43

0.45

0.45

Unaudited Condensed Consolidated Statements of Financial Position
As of March 31, 2014 and December 31, 2014
(In millions of USD)

 

As of March 31, 2014

As of December 31, 2014

Assets

 Property and equipment

1,726

1,815

 Intangible assets and Goodwill

692

635

 Accounts Receivable

3,035

3,276

 Unbilled Revenues

667

660

 Investments

576

495

 Cash and Cash equivalents

245

376

 Other current assets

3,012

2,709

 Other non current assets

1,520

1,255

 Total Assets

11,473

11,221

Liabilities and Shareholders' Equity

 Shareholders' Funds

9,213

8,726

 Long term borrowings

21

20

 Short term borrowings

28

33

 Other current liabilities

1,816

2,037

 Other non-current liabilities

280

267

 Minority Interest

115

138

 Total Liabilities

11,473

11,221

About Tata Consultancy Services Ltd. (TCS)

Tata Consultancy Services is an IT servicesconsulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of ITBPSinfrastructureengineering and assurance services. This is delivered through its unique Global Network Delivery Model™, recognised as the benchmark of excellence in software development. A part of the Tata group, India’s largest industrial conglomerate, TCS has over 318,000 of the world’s best-trained consultants in 44 countries. The company generated consolidated revenues of US $13.4 billion for year ended March 31, 2014 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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For more information, please contact

Media
Email: Pradipta.bagchi@tcs.com | ashish.babu@tcs.com | shamala.p@tcs.com |h.ramachandra@tcs.com
Phone: +91 22 6778 9999

Investor Relations
Email: Kedar.shirali@tcs.com
Phone: +91 22 6778 9999