Tata Consultancy Services (TCS) — the largest software firm of India — on Monday posted a decent result for the fourth quarter (Q4) of fiscal year (FY) 2008-09 by reporting a 7% profit, a 2% dip from the previous quarter.
On this declining, TCS has said that the global turmoil has hurt the IT business a lot. A 2% decline in profit occurred mainly due to a 2.5% fall in pricing and a hedging loss of Rs 192 crore during the quarter.
‘However, the company has been able to achieve the growth margin as a result of its enterprise-wide cost cutting policy and operational efficiencies,’ TCS chief executive S. Ramadorai said in a statement while releasing its Q4 result that showed a growth of Rs 1,333 crore .
‘Besides, the collection of cash more efficiently and driving an employee-based cost-control programme has together improved our operating margins by 104 basis points... We continue to drive our cost-control programme and have held down our costs significantly,’ he added.
Despite the loss in the profit, TCS has announced a surprising bonus to its stakeholders that would be a dividend of 1:1 issue of bonus share, a total Rs 14 per share, including Rs 5 as final dividend.
This is the second dividend issued by TCS after being a limited company five years ago. In 2006, it had announced a similar bonus.
In terms of net profit TCS grew 4.6% year-on-year to Rs 1,314 crore, while revenues grew 17.7% to Rs 7,171.8 crore in the fourth quarter of FY09.
During the FY 08-09, the company posted a net profit of Rs 5,256 crore, a 5% growth, while in total revenue it recorded a 23% rise of Rs 27,812.88 crore.
In forex, TCS bore a loss of Rs 192 crore for the March quarter, which is expected to continue in the next quarter, as per market experts.
‘It closed 28 deals during the year and added 163 new clients including 36 new clients in the fourth quarter,’ TCS said in a release.
During the Q4, the biggest IT exporter added only record low of 521 net employees as a move of cost management, which it had officially quoted a cost management year.
In FY 2008-09, TCS added 32,354 employees to take the total strength to 143,761, the biggest among IT firms, while for downing employee expenses it shifted thousands of employees from expensive onsite locations to offshore sites, which resulted a decline in travel expenditure and other expenses. Through this cost management, TCS saved a substantial Rs 121 crore during the quarter. It has also ruled out salary increases.
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