Date:14/01/2005 URL: http://www.thehindubusinessline.com/2005/01/14/stories/2005011402400100.htm

Back TCS posts Rs 643-cr net in Q3

Our Bureau

Mumbai , Jan. 13

BETTER prices, better realisations, more offshoring and robust other income of Rs 141 crore (consolidated, under Indian Generally Accepted Accounting Principles - GAAP), largely from foreign exchange hedging gains, has led to Tata Consultancy Services Ltd (TCS) reporting increased revenues and profits for the third quarter ended December 31, 2004.

The board of directors of TCS will be meeting next week to consider a second interim dividend for the year, as the company had already announced an interim dividend in October last year, said Mr S. Mahalingam, Chief Financial Officer, TCS, at a news conference here on Thursday.

The company has reported a net profit of Rs 643 crore for the third quarter ending December 31, 2004, while income from operations amounted to Rs 2,096 crore, with other income at Rs 123 crore. On a consolidated basis, net profit for the quarter amounted to Rs 718 crore, with total income at Rs 2,691 crore.

The year-on-year growth in these figures could not be provided, since the results for the corresponding period of the previous fiscal under Indian GAAP could not be made available, TCS having been a division of Tata Sons during that time, said Mr S. Mahalingam.

According to the comparative figures available under US GAAP, the company has reported a 54 per cent growth in net income after tax at Rs 709 crore, up from Rs 460 crore reported for the corresponding quarter of the previous year. Revenues were up 38.2 per cent at Rs 2,578 crore from Rs 1,866 crore. The company expects to cross the $2-billion mark in the current fiscal, said Mr Mahalingam.

Gross margin stood at 47.55 per cent, up from 45 per cent during the immediate previous quarter. This was due to cost of revenues at Rs 1154 crore coming down to 54.09 per cent of revenues from 55 per cent over the last three months. Additionally, there was an offshore shift in revenues by 2.5 percentage points, with this component accounting for 40 per cent of revenues, up from 37.5 per cent as of September-end, 2004.

Income before taxes amounted to Rs 842 crore (Rs 538 crore). The contribution of General Electric, the company's largest client, has been coming down steadily every quarter, and has accounted for 14.8 per cent of international revenues, down by 1.1 percentage points from the second quarter, said Mr Mahalingam. However, the top client still contributes 5.1 per cent to total revenues; the top five clients contribute 20 per cent and the top ten 31.8 per cent. The US accounted for 59.5 per cent of revenues, and Europe 23.5 per cent. The revenue from repeat business was down to 94.2 per cent from 96.1 per cent in the second quarter.