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TCS Q3 PAT up 15.1% at Rs 5333 crore, beats estimates – The Economic Times

NEW DELHI: Tata Consultancy Services (TCS), India’s largest IT services exporter on Thursday reported a Profit After Tax (PAT) of Rs 5333 crore for the third quarter of the current financial year. This is above an ET Now Poll estimate of Rs 5,124.50 crore. The third quarter profit was up 15.1% on a quarterly basis and 50.3% on a yearly basis. The company had reported at profit of Rs 4,633 crore in Q2. Sales for the third quarter were reported at Rs 21,294 crore. While the volumes for Q3 were up 1.8%, the operating margins came in at 29.8%. The realisations for the quarter were up 74 basis points. TCS declared a dividend per share of Rs 4 and Earning Per Share were reported at Rs 27.20. Mumbai-based TCS reported international revenues, excluding sales at home, rose 3.8% in dollar terms. This constitutes the bulk of the company’s revenue. The IT major also announced a hike in its hiring target for FY14, up 5,000 at 55,000 from an earlier estimate of 50,000. The company reported a gross employee addition of 14,663 for the third quarter. Its total headcount was 290,713. Commenting on the Q3 performance, N Chandrasekaran, CEO & MD of TCS said, “Strong international demand for our services and discipline in execution has helped TCS maintain its momentum and post robust growth in volumes as well as realisation. Our diversified market presence and services portfolio have helped us overcome seasonal weakness and soft demand in the Indian market.” “Based on initial discussions with our customers we believe 2014 will be a stronger year for us than 2013, as customers execute their business plans in a relatively stable environment. With Digital technologies rapidly changing the way an enterprise operates in multiple dimensions, our continuous investments positions us well to help customers reimagine their business,” Chandrasekaran added. Rajesh Gopinathan, Chief Financial Officer, said, “We have been able to maintain our profitability by operating in a disciplined manner while sustaining our investments in customer-facing initiatives globally. We have also been able to significantly increase our cash generation due to efficient working capital management.” Shares in TCS closed the day at Rs 2351.35, down 0.12% on the Bombay Stock Exchange . The stock hit an intra-day high of Rs 2380.00 and a low of Rs 2321.10. After rallying over 70 per cent in 2013, the IT major is putting up a strong show in 2014 as well gaining nearly 10 per cent so far in the year. Historically, the stock has seen profit booking after the announcement of results and hence traders should adopt a cautious stance. The company has shown consistent results in the last few quarters and has emerged as a market leader in terms of setting the trend for the entire IT sector. Earlier this month, the traditionally conservative No. 2 company Infosys said the year ahead would be “exciting,” its most aggressive commentary in recent quarters, and raised its sales forecast for the year ending March 31. Earlier today, fourth-ranked HCL Technologies beat expectations, held margins and reported strong business volume growth on the back of broad-based growth in the US and Europe. The United States is the Indian IT sector’s biggest market. TCS doesn’t provide a forecast, but Chandrasekaran has said the company will grow faster than the 12-14% industry exports outlook estimated by the sector lobby Nasscom.
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