Going Great Guns



If the performance of the Indian software sector in the first six months of
the current fiscal ended September 30, 2004 is any indicator, the good days are
back with a bang. The published results of eight companies (of which we
present the top five below)-TCS, Wipro, Infosys, HCL Infosystems, Satyam, HCL
Technologies, CMC and MphasiS-augur that the tech sector revival has
definitely arrived in India. On a cumulative basis, the top eight companies
achieved sales of Rs 18,382.7 crore, which is 53% higher than the figures for
the same period last year. Operating profits grew by 60% y-o-y, while net
profits advanced 48% to Rs 4,092.1 crore as compared to the figures for the
same period last year.

TCS
The recently listed Tata-group company has been in top spot in sales for the
first six months of the year. TCS achieved sales of Rs. 4,594.3 crore for the
six months of the current fiscal, registering a 43% growth. Operating profit for
the same period amounted to Rs. 1302.8 crore, up 66% and the net profit amounted
to Rs. 791.8 crore, up 16%. Revenues from the US for the half-year ended
September 2004 contributed 60%, amounting to Rs 2,754.4 crore, followed by
India, which contributed 22%, amounting to Rs 1,029.3. Europe contributed 12% of
the total half yearly revenues, amounting to Rs 565.9 crore, whereas the rest of
the world contributed the balance 6%, amounting to Rs 244.7 crore. Revenues from
consultancy services rendered by TCS amounted to Rs 4,365.5 crore, contributing
95% of the half-yearly total, whereas the balance 5% of the revenues were earned
from the sale of software licenses, which amounted to Rs 228.8 crore. In order
to focus independently on the BPO services, TCS sold its 50% stake in the BPO JV
with HDFC, Intelenet Global Services, for around Rs 161 crore before the IPO.

Financial
Performance
  2004
(Apr—Sept)
2003
(Apr—Sept)
Variance
(%)
Sales 4,594 3,219 43
Other
Income
36 22 68
Operating
Profit
1,303 785 66
OPM
(%)
28 24  
Net
Profit
792 683 16
Figures
in Rs crore unless stated otherwise
All
figures are rounded-off

Wipro
The Bangalore-based IT major has taken the second place in sales for the
first six months of the year. The company achieved sales of Rs 3,755.6 crore,
47% over the sales in the same period last year. Operating profit margins (OPM)
advanced 7%, and net profit grew by 74% to reach Rs 768.7 crore as compared to
the first six months of the previous year. The company’s three geographic
segments, USA, India and the rest of the world, contributed 53%, 22% and 25% of
the revenues, amounting to Rs 1,973.6 crore, Rs. 836.8 crore and Rs. 937.2 crore
respectively, with increased contribution from USA over the last year. The
company signed a five-year deal with AXA Australia amounting, to AUD17 mn to
provide application maintenance and development services to support the wealth
management and financial protection products. Wipro also won a multi-year
contract for application maintenance, support and development of Loyalty Gate’s
business critical loyalty application, used for providing loyalty services to
three leading European airlines. The company expects revenues of $347 mn for the
quarter ending 31 December 2004.

Financial
Performance
  2004
(Apr—Sept)
2003
(Apr—Sept)
Variance
(%)
Sales 3,756 2,551 47
Other
Income
36 58 -38
Operating
Profit
865 445 94
OPM
(%)
22 15  
Net
Profit
769 443 74
Figures
in Rs crore unless stated otherwise
All
figures are rounded-off

Infosys
The Bangalore-based software major Infosys is in the third place for sales
for the first six months of the year. The company achieved sales of Rs 3,266.7
crore, 45% higher over the sales in the previous year. The operating profit
margin grew 43% and the net profit grew by 44% to reach Rs 835.7 crore as
compared to the first six months of the previous year. Revenues for overseas
business activities continued to contribute the major portion of the total
revenues amounting to Rs 3,212.7 crore, up 45% y-o-y. Revenues from domestic
activities also grew 28%, amounting to Rs 54 crore as compared to Rs 42.1 crore
for the half-year ended September 2004. 61 clients were added during the six
months and the company’s top 10 clients contributed 38% of the revenues. The
employee strength as on 30 September 2004 was 32,949. The company had 37,79,250
sq ft of space, accommodating 19,900 seats and 9,87,000 sq ft under completion,
accommodating 7,540 seats. The company estimates to earn revenues of Rs
1,869-1,882 crore for the quarter ending December 2004. Revenue for the next
fiscal 2005 is projected to be between Rs 7,132-7,160 crore.

Financial
Performance
  2004
(Apr—Sept)
2003
(Apr—Sept)
Variance
(%)
Sales 3,267 2,247 45
Other
Income
45 75 -40
Operating
Profit
1,050 732 43
OPM
(%)
31 29  
Net
Profit
836 580 44
Figures
in Rs crore unless stated otherwise
All
figures are rounded-off

HCL Infosystems Limited
This Shiv Nadar Group company achieved sales of Rs 2,861.3 crore for the
first six months of the year, up 146% as compared to sales in the previous year.
OPM declined by 14 basis points to take operating profits to Rs 111.3 crore
during the six months of the current year as compared to the same period in the
previous year. Net profit increased by 59% to reach Rs. 89 crore as compared to
the first six months of the previous year. HCL Infosystems recently won a Rs 76
crore order from the Department of School Education, Punjab, comprising 18,200
PCs, servers, printers and UPSs. In addition, HCL will supply, install and
maintain the IT Infrastructure in 1,287 government schools both in rural and
urban areas across the state of Punjab as part of this project. On the
enterprise business front, HCL bagged large orders from the New India
Co-operative Bank, Oriental Insurance Company, Central Bank of India, United
Bank of India, Seimens, Sun Pharmaceuticals, ELCOT, Larsen & Toubro, TVS
Electronics, the Chennai Election Commission, Elgi Equipments, HFCL HDFC
Standard Life Insurance and NALCO Industries, to name a few.

Financial
Performance
  2004
(Apr—Sept)
2003
(Apr—Sept)
Variance
(%)
Sales 2,861 1,161 146
Other
Income
9 15 -37
Operating
Profit
111 58 93
OPM
(%)
4 4  
Net
Profit
89 56 59
Figures
in Rs crore unless stated otherwise
All
figures are rounded-off

Satyam Computer Services
The company achieved sales of Rs 1,641.9 crore for the six months of the
current fiscal, up 40% over the sales in the same period of the previous year.
Operating profit for the period amounted to Rs 406.9 crore, which was 26% higher
than the achievement in the first six months of the previous year. Net profit
jumped by 55% to reach Rs 1,137.4 crore. Satyam launched its largest Global
Development Center (GDC) outside of India in Melbourne, Australia, to serve as a
major technological development and software support center for the company’s
Asia Pacific operations, which is in addition to its first Australian
development center in Sydney in November 2001. The revenues for the financial
year ending March 2005 are expected to be in the range of Rs 3,350-Rs 3500 crore,
and net profits, Rs 690-730 crore.

Financial
Performance
  2004
(Apr—Sept)
2003
(Apr—Sept)
Variance
(%)
Sales 1,642 1,169 40
Other
Income
55 42 30
Operating
Profit
407 322 26
OPM
(%)
21 24  
Net
Profit
1137 732 55
Figures
in Rs crore unless stated otherwise
All
figures are rounded-off

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