Ramadorai: Good news

Mumbai, July 18: Tata Consultancy Services (TCS), the country’s largest software exporter, today reported an almost 40 per cent surge in net profit at Rs 882.66 crore for the first quarter (April-June) ended June 30 compared with Rs 630.62 crore in the year-ago period.

The company easily beat street forecasts, though its numbers were somewhat weaker than its closest rival Infosys, which reported a 50 per cent surge in first-quarter net profit just a week ago.

The TCS management said the quarter had seen strong volume growth, which helped it record a total income of Rs 4,227.19 crore compared with Rs 2, 682.30 crore for the same quarter in the previous financial year, an over 55 per cent year-on-year growth.

However, the company saw a drop in its segment-wise revenue distribution when it came to the domestic market. It registered a revenue of just Rs 47.85 crore in the domestic market compared with Rs 68.30 crore in the first quarter of the previous fiscal.

Explaining the drop in revenues in India, S. Ramadorai, CEO and MD, said, “Most of the domestic orders that we get are turnkey projects. Thus the revenue from them is less. Also the first quarter this year has been affected by the Tata Infomedia merger with TCS, and CMC. Generally the first quarter of every financial year is little slower, but it picks up later.”

The company is also looking at an increased growth from Europe and Latin America.

“We already have close to 2,000 people in Latin America. Although Europe and Latin America may not contribute as significantly as the US right now, they are increasingly becoming very important for us,” Ramadorai added.

TCS has also seen an increase in its billing rates this quarter. “The billing rates are higher almost 3 to 4 per cent. New contracts are being signed at a higher billing rate,” N. Chandrasekaran, executive vice-president and global head of sales and operations, said.

As a result of a stronger rupee, the company has booked a gain of close to Rs 30 crore and in dollar terms it has gained close to three and a half per cent.