India's largest software exporter Tata Consultancy Services on Thursday reported a steep 27 per cent fall in net profit at Rs 3,858.2 crore (Rs 38.58 billion) in the January-March quarter, primarily due to a one-time employee bonus of Rs 2,628 crore (Rs 26.28 billion).
The company had reported a net profit of Rs 5,296.7 crore (Rs 52.97 billion) in the same period last fiscal.
The Tata Group company, which chips in with more than 60 per cent of the group's overall profit, reported a revenue growth of 12.4 per cent at Rs 24,219.8 crore (Rs 242.2 billion) in the reporting quarter, up from Rs 21,551.1 crore (Rs 215.51 billion) a year ago.
The overall weak numbers were contributed by a steep fall in net margin, which in rupee terms plummeted to 15.9 per cent from 24.6 per cent, primarily because of the rupee volatility, which resulted in a margin compression.
Commenting on the numbers, company MD and CEO Natarajan Chandrasekaran told reporters that "we had hinted at cross currency headwinds, it proved to be worse. We lost 2.70 per cent to that. Still we've done well, I would say."
Right before the result announcement, the company had announced a whopping Rs 2,628 crore one-time bonus to employees to celebrate its one decade of being a publicly traded company.
TCS went public in August 2004 and today is the country's most valued company with over Rs 5.05 lakh crore in market value and also the second most valued IT firm after IBM.
Globally, all employees who have completed at least one year of service will be eligible for the special bonus. The company had 3.18 lakh employees as of December 2014 quarter.
Each employee will be given a reward equivalent to one week's salary for every year of service completed at TCS, it added.
Chandrasekaran said the headwinds came in from telecom, insurance and energy sectors and the company had cautioned about all the three earlier.
During the quarter, TCS added 14,395 employees, while on a net basis the addition was 1,031, he added, taking the overall employee strength to close to 330,000. The utilisation rate excluding trainees was 85.4 per cent.
The company will hire 60,000 at a gross level in FY16, said the HR head Ajoy Mukherjee, adding the company has also announced an average salary hike of 8 per cent in India and 2-4 per cent at the global level.
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