Prudent strategies like moving work offshore and judicious management of staff expenses helped software company Tata Consultancy Services Ltd (TCS) post nearly 19% growth in first quarter net profit.
For the first quarter to end-June, TCS, India's largest software company, reported a net profit of Rs15.3 billion from Rs12.9 billion as total revenues increased 12% to Rs72.1 billion from Rs64.1 billion, same period last year.
Though the Tata group company did not give any guidance, it said it has a 'healthy deal pipeline' and 20 new deals that were signed last fiscal would kick in this year.
"It is not a one-off performance. We have seen stellar growth in the first quarter. We are watchful of a weak global environment and do not rule out there could be shocks and surprises along the way," TCS managing director and chief executive S Ramadorai said.
Sounding cautious of global environment, TCS said telecom, manufacturing and hi-tech continue to be a matter of concern.
"The recovery in the US is not going to take place in a very swift or accelerated manner. The situation is not going to be great," Ramadorai added.
The earnings per share, an indicator of company's profitability, was up 15% Rs7.83, over the last quarter and it declared a dividend of Rs2 per share on a post-bonus equity basis.
"Moving work offshore, managing employee costs and conserving cash helped the company achieve significant improvement in margins and earnings per share," TCS chief financial officer and executive director S Mahalingam said.
The company added 26 clients in the quarter and the share of revenue from its top 10 clients grew to 28% from 26.8% in the previous quarter.
"Telecom, manufacturing and hi-tech are the verticals that continue to worry us. These will take time to recover," company's chief operating officer and executive director N Chandrasekaran said.
Meanwhile, the company also said the US banking sector is stabilising, but manufacturing still remained a concern.
It would continue to invest in life-sciences, pharmaceutical and healthcare, which would be major growth drivers this year.
The company witnessed a gross addition of 2,828 employees in the first quarter, while attrition rate remained flat at 11.5 per cent. TCS will make a total of 24,885 fresh recruitments this year, offers for which it has sent to campuses in FY'09.
"Last year, we made 24,885 new offers in campuses across the country. We intend to keep our hiring commitments. They will be joining us throughout the year," TCS vice-president, head-global human resources, Ajoy Mukherjee said.
Although it is hiring selectively, the company remains on track for its graduate hiring programme in 2009-10, he added. TCS current employee strength stands at 141,642.