India’s largest software services exporter Tata Consultancy Services (TCS) reported a 23 per cent annual growth in fiscal year 2009, crossing the $6 billion revenue milestone in the process. However, the results also had its share of disappointments.
Like Infosys, TCS reported sequential revenue and profit degrowth — TCS said its revenues dipped 1.5 per cent in the March quarter compared to the year ago period, reflective of the tough business climate where customers are postponing IT purchase decisions.
TCS’ annual net inched up 5 per cent to Rs 5,256 crore or Rs 53.63 per share, up from Rs 51.36 a share of the previous year.
CEO and managing director S. Ramadorai while expressing satisfaction over the firm’s performance amidst the global crisis warned of hard times ahead. “The current fiscal would be tough and net profits growth would remain in single digit in percentage terms. During 2008-09, the company has delivered a healthy growth in revenues. TCS has a cash balance of Rs 4,300 crore,” he said. The board of directors has recommended a dividend of Rs 14 per share and a 1:1 bonus share issue, he added.
“Cost reduction by rationalising of manpower and travel costs, besides offshore leverage which increased by 2.27 per cent during the last fiscal, have boosted efficiency. Looking ahead, we will continue to focus on operational improvements and look to leverage our established client base for volume growth in major and new growth markets,” COO and executive director of TCS N.Chandrasekaran said.
Though retail and BPO sectors have shown a growth of 60 per cent and 40 per cent respectively, certain sectors such as manufacturing and telecom have not performed well.
Chandrasekaran said that 45 per cent of the firm’s clients from the manufacturing and telecom sector have witnessed a decline in revenues while more than 50 per cent from these sectors have witnessed pressure on the net profits. As a result, discretionary projects have not started off; clients are renegotiating contracts.
Like Infosys, TCS reported sequential revenue and profit degrowth — TCS said its revenues dipped 1.5 per cent in the March quarter compared to the year ago period, reflective of the tough business climate where customers are postponing IT purchase decisions.
TCS’ annual net inched up 5 per cent to Rs 5,256 crore or Rs 53.63 per share, up from Rs 51.36 a share of the previous year.
CEO and managing director S. Ramadorai while expressing satisfaction over the firm’s performance amidst the global crisis warned of hard times ahead. “The current fiscal would be tough and net profits growth would remain in single digit in percentage terms. During 2008-09, the company has delivered a healthy growth in revenues. TCS has a cash balance of Rs 4,300 crore,” he said. The board of directors has recommended a dividend of Rs 14 per share and a 1:1 bonus share issue, he added.
“Cost reduction by rationalising of manpower and travel costs, besides offshore leverage which increased by 2.27 per cent during the last fiscal, have boosted efficiency. Looking ahead, we will continue to focus on operational improvements and look to leverage our established client base for volume growth in major and new growth markets,” COO and executive director of TCS N.Chandrasekaran said.
Though retail and BPO sectors have shown a growth of 60 per cent and 40 per cent respectively, certain sectors such as manufacturing and telecom have not performed well.
Chandrasekaran said that 45 per cent of the firm’s clients from the manufacturing and telecom sector have witnessed a decline in revenues while more than 50 per cent from these sectors have witnessed pressure on the net profits. As a result, discretionary projects have not started off; clients are renegotiating contracts.
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