TCS

The much awaited results of this IT giant came in late in the evening and it did not belie expectations. It was as per expectations, which many on the street called flat. It posted a consolidated net profit, down 6% (QoQ) at Rs.5244 crore on a 8% jump in revenue at Rs.23,816 crore. In terms of US$, revenue rose over 6% at $3929 million. EBITDA during the quarter was up 10% at Rs.6394 crore. And the most widely watched figure of TCS, the EBITDA margin, came in at 26.85%, which was 55 bps over Q1 margin of 26.3%. There had been a lot of speculation about the company being able to maintain margins at this 26% level but the company delivered much better, driven mainly by strong growth in volume and utilization rates. Volume growth was at 6% and utilization rate was at 86.2% (excluding trainees). Attrition rate (last twelve months) was 12.8% at the end of quarter. There was a total gross addition of 20,350 people (net addition of 8,326 employees) taking the total employee strength of 313,757 employees on a consolidated basis.

Growth in Q2 was broad-based with all industries growing on a sequential basis. The impact of the integration of newly merged entity in Japan also provided additional growth to units like Manufacturing, Hi-Tech. All core markets like North America, Europe and UK grew. Emerging markets continued to be volatile with India growing while Latin America faltered in Q2. North America grew 4%, UK grew 3%, India rose almost 10%, Latin America fell 8%, Asia PAC grew the most at 41.35% while Middle East was almost status quo, growing just 1%. Europe rose 2%.

But more than the results, the big news in the company – the Board of the company approved amalgamation of its subsidiary, CMC into TCS. And the amalgamation ratio – shareholders of CMC will receive 79 equity shares of Re 1 each of TCS for every 100 shares of Rs.10 each held.