TCS Q4 profit beats estimates, expects better growth next year

Tata Consultancy Services (TCS), India's largest IT services exporter, posted a 51.5 per cent rise in quarterly net profit, beating expectations, as it won more contracts in Europe and some emerging markets.

Net profit for the fourth quarter ended March 31 rose to Rs 5,297 crore from Rs 3,497 crore a year earlier, TCS said in a statement on Wednesday.

That compares with the Rs 5,198 crore average of 23 analyst estimates, according to Reuters.

In dollar terms, TCS net profit climbed to $3.50 billion, a rise of 1.9 per cent from the December quarter. Its net profit came in at $861 million, up 2.9 per cent sequentially.

CEO Natarajan Chandrasekaran said it expects better growth in 2014-15 as compared to the previous year. "We are exiting the year with great momentum and we predict that FY15 will be better than FY14," he said. Its operating margin during the quarter stood at 29.1 per cent.

Ajoy Mukherjee, head of global human resources at TCS, said average pay hike in India will be 10 per cent. He added that high performers will get 14 per cent or more.

Its employees in developed markets will get 2-4 per cent hike while those in developing markets 4-6 per cent, according to Mr Mukherjee.

He added that TCS is looking at a gross addition of 55,000 entry-level employees out of which 25,000 campus selections have been closed.

During the fourth quarter, TCS saw a net employee addition of 9,751 employees, taking its total staff strength to 300,464. It attrition rate during the fourth quarter remained at 11.3 per cent.

Shares of TCS closed at Rs 2,196.30, down 2.5 per cent, on Wednesday. The results were released after market close. (With Reuters inputs)