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TCS's profit up 6 pc, says outlook 'bright'

News18test sharma, |

Updated: October 17, 2011, 10:51 PM IST
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TCS's profit up 6 pc, says outlook 'bright'
TCS' human resources head Ajoy Mukherjee said the visa rejection issues continued to affect the company.

Mumbai: Country's largest software exporter TCS on Monday reported a 6.1 per cent jump in the profit for the September quarter at Rs 2,301 crore and gave a "bight" outlook on the back of a good order book even though macro environment continues to be uncertain.

The Tata Group company's profit for the corresponding period last fiscal was Rs 2,169 crore.

Revenue for the period under review grew a robust 25.3 per cent to Rs 11,633.49 crore as against Rs 9,286.39 crore in the year-ago period. These numbers are under the Indian accounting norms.

"We have signed 10 large deals in the quarter and chasing at least 10 large deals now. The order book has been very good and the outlook is very bright," TCS Chief Executive Officer N Chandrasekaran told reporters here.

The company board proposed an interim dividend of Rs 3 per share. At the end of the reporting quarter, the company had a cash and bank balance of Rs 7,036.79 crore.

TCS' human resources head Ajoy Mukherjee said the visa rejection issues continued to affect the company.

On the demand environment, Chandrasekaran said: "Even though the macro uncertainty continues and there is lot of negativism, we are getting positive vibes from customers in terms of their IT spends going forward."

The company monitors its clients regularly and has not found any "warning signs" from any of customers, he added.

TCS Chief Financial Officer S Mahalingam said despite depreciation of rupee, the company's bottom line took a hit of Rs 91 crore because of its forex hedges. TCS has $2.5 billion in hedges at present and the average hedge is at Rs 47.50 to a dollar, he said, adding it would like the American unit to be at Rs 46 for good operating margins.

The earning figures were announced after Monday's market hours. Earlier in the day, edgy investors pulled down the TCS stocks by 1.30 per cent down at Rs 1,119.80 on the BSE.

"TCS' results were largely in line with estimates. The 6.25 per cent volume growth was the highlight. The 94 bps improvement in operating margins was largely due to the currency fluctuations, we believe," Kotak Securities Head Fundamental Research Dipen Shah said.

Helped by a weakening rupee, peer Infosys had announced last week close to 10 per cent jump in profit for the second quarter period which had helped the BSE benchmark Sensex to surge by over 420 points.

On acquisitions, Chandrasekaran said TCS continues to scout for assets in Japan and Europe, but has been unable to find a suitable target which is focused on the healthcare sector.

He added it will also look for strategic acquisitions of targets for newer technologies, even though the value of such deals will not be high.

First Published: October 17, 2011, 10:51 PM IST
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