Tata Consultancy net up seven percent, but scrip falls

July 16th, 2008 - 9:26 pm ICT by IANS  

Mumbai, July 16 (IANS) Software giant Tata Consultancy Services (TCS) Wednesday announced a consolidated profit after tax (PAT) of $322.65 million (Rs.12.9 billion) during the first quarter this fiscal, compared to $300.73 million (Rs.12.02 billion) for the same period last year, recording a growth of seven percent on a year-on-year basis. However, its scrip fell three percent, losing 22.35 points, and closed at Rs.727.35 at end of trade Wednesday.

For the latest quarter ending June 30, its total income increased to $1.63 billion (Rs.65.3 billion) from $1.3 billion (Rs.52.1 billion) in the corresponding quarter last year, reflecting an increase of 24 percent.

The company, which added 35 new clients this quarter, taking the total active client base to 885, experienced an overall attrition rate of 12.8 percent. The attrition rate in its BPO division stood at 20.5 percent.

TCS chief executive and managing director S. Ramodorai said the banking, finance, security and insurance sectors’ contribution to the total revenue has come down from 43.8 percent to 42.5 percent, as compared to the quarter ended March 31.

“Negative demand from the BFSI sectors impacted revenue. We will remain cautiously optimistic for the year,” he said. “Impact of wage hike and rupee depreciation also had an adverse effect,” Ramodoari added.

TCS experienced reduced margins by 147 basis points due to high operating costs. The company had a salary expenditure of Rs.23.1 billion and experienced a net forex loss of Rs.753 million.

However, it grew eight percent in major markets like the US, Britain and Europe “despite challenging external scenario,” TCS chief operating officer and executive director N. Chandrasekaran said in a statement.

“Our diverse business portfolio like manufacturing, life sciences and retail verticals has helped growth in the first quarter,” he said.

The company has declared a dividend of Rs.3 per share.

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