TCS results make a huge pitch for the IT industry's revival

Close on the heels of a positive performance of Infosys, the apple of the IT industry's eye, TCS, too came out with flying colors in the Q3 performance. It has reported 3.3% growth in revenue to $2.948 billion during the Q3 quarter and raised its profits by 1.4% to $652 million.

 The highlights of the performance were:

• Revenue of Rs 16,070 crore; up by 21.7% y-o-y; 2.9% Q-o-Q 
• Operating margin expands 51 basis points to 27.3%
• Net profit at Rs 3,552 crore; up 23 % y-o-y; 1.1% Q-o-Q
• Attrition in IT services dips below 10% 

• Number of $100-million-plus clients increases to 16 from 14

Commenting on the Q3 performance, chief executive officer and managing director, N Chandrasekaran said, "We have had an excellent quarter of well rounded performance and have driven a higher quality of revenue and increased profitability through focus on productivity and innovation. We had good revenue growth, balanced across service-lines, industries and geographies; our agile, customer-centric organization is delivering an increasing number of larger and deeper client relationships." He added: "We believe that clients are going to invest in making their operations ‘digital-ready' in 2013 and drive business growth. TCS is well positioned to help our clients in this journey."

S Mahalingam, chief financial officer and executive director also stated, "The overall performance has been in line with what we had outlined at the beginning of the year. Our superior execution in this seasonally weak quarter has delivered productivity gains and an expanded operating margin." He added, "Our business model of delivering growth with the desired profitability requires us to invest in the front-end and in new capabilities and we will continue to make those investments."

 The company also had a better utilization rate of 81.7% (including trainees) and a total headcount of 2.6 lakh employees. Bolstered with huge wins in North America, USA and UK markets led the growth story.

Amongst growth markets, Latin America showed double digit growth sequentially, followed by India. Amongst industries, growth was led by Banking, Financial Services and Insurance (BFSI), Energy & Utilities, Manufacturing & Retail & Distribution.

In terms of services, TCS' full services capabilities continue to be leveraged by customers with newer service lines like Enterprise Solutions, Infrastructure Services and Global Consulting driving growth. Asset Leveraged Solutions and Engineering and Industrial Services also showed higher growth.