Tata Consultancy Services, the biggest of the Indian offshorers, posted revenue for the fourth fiscal quarter ended March 31, 2006 of $836.5m, up 44% from the same period last year. Meanwhile, net income jumped 72% to $181.4, and earnings per share came in at 37 cents. For the year, revenue increased 36% to $2.97bn, net income was up 41% to $649.2m, and EPS hit $1.33, up from 96 cents last year.
The TCS top-line results were buoyed by an aggressive acquisition policy over the last year, including the purchase of Chilean BPO outfit Comicrom SA for $23m last November and Australian banking software vendor Financial Network Services Pty Ltd for $26m in October. And the company won several large deals over the year, including an $838m pact with UK-based insurer Pearl Group Ltd in October.
Overall, TCS added 89 clients in Q4 and 330 clients for the year. The company also confirmed it had won a new $500m contract, and although it has declined to name the client, several Indian media reports have indicated that the order has come from Citigroup for application development and maintenance for the financial services giant’s consumer division.
TCS reported its results after the Mumbai exchange closed, but shares still increased by 5.9% in anticipation of strong results.
Infosys’ growth wasn’t as high as TCS’, but a strong guidance that broke from the company’s normally conservative forecasts helped push up its share price 13% on the NASDAQ to close at $84.78 on Monday April 17, 2006.
The results also got the company back on track after a disappointing Q3. Fiscal Q4 revenue increased 30% to $593m, and net income rose 34% to $152m. EPS for its American Depositary Shares for the quarter was 54 cents, only one cent short of analysts’ expectations. Infosys’ full-year revenue climbed 35% to $2.15bn, with net income up 32% to $555m.
While TCS doesn’t provide guidance, Infosys gave a bold outlook for the coming quarter and full year. The company expects EPS of 55 cents or 56 cents on revenue of between $628m and $633m, which represents sales growth of 32% to 33%. The full-year expectation is for EPS of $2.57 to $2.61 on revenue between $2.76bn and $2.80bn.
Both firms intend to boost their workforce by nearly 50% this year. Infosys ended the fiscal year with more than 52,000 employees worldwide and plans to add at least 25,000 more in the coming year. TCS’ headcount at fiscal year’s end was nearly 63,000, and it plans to add more than 30,000 workers this year.
