TCS revenues cross $3 billion in H1 on strong operational performance

Mumbai, October 22, 2008: Tata Consultancy Services (BSE: TCS.BO, NSE: TCS.NS) reported its consolidated financial results according to US GAAP for the quarter ended September 30, 2008.

Highlights for Quarter Ended September 30, 2008:

H1 Revenues at $3.1 billion up 17.69 % Y-o-Y
H1 Net Profit at $ 582 million (2.8 %) Y-o-Y
Q2 Revenues at $1.57 billion; up 14.74% Y-o-Y, up 3.21% Q-o-Q
Q2 Net Profit at $ 287 million (3.4%) Y-o-Y, (6.9%) Q-o-Q
51 new clients added in Q2
9,682 employees joined the company in Q2
Attrition at 13.2% LTM (including BPO)
Quarterly dividend of Rs 3 per share
EPS at $0.29 in Q2

TCS CEO and MD, S. Ramadorai said: Our growth has been balanced across markets and verticals with a 9.5 per cent sequential growth in our international business during Q2 and we have improved margins significantly.” He added: “New opportunities are emerging and there are signs that our services will play a significant part in the global economic recovery. Our acquisition of Citigroup Global Services will provide another driver for growth.”

S. Mahalingam, Chief Financial Officer, said: “In a quarter where the Indian rupee and global currency has been very volatile, TCS has managed to deliver greater profitablity by achieving significant improvement in operating profits and margins. We have a sustainable business model and we remain focused on managing risks, continued growth and delivering margin improvements going forward.

“Our business model is resilient and we have demonstrated this in Q2 through volume growth, improvement in our offshore leverage, pricing, productivity as well as over 50 new client wins. We have a robust pipeline even in the current environment and our diversified market presence and full services will drive growth in the future,” said N. Chandrasekaran, Chief Operating Officer.

International business grew 9.5 per cent sequentially. While North America posted positive growth, ramp ups from recent large outsourcing wins continue to drive growth in UK and Continental Europe. Balanced growth across new growth markets like Ibero-america, APAC, Middle East and Africa helped compensate for softer growth in developed markets.

The BFSI sector continued to register positive growth despite unprecedented volatility and uncertainty in the global financial markets. The Manufacturing and Retail verticals grew as large transformation deals ramped up, while the Travel, Energy and Media verticals gained traction in new markets. While outsourcing services continued to enjoy strong demand across major markets, traditional application development and maintenance opportunities gained futher prominence in the current economic climate. Engineering services continues to experience strong demand across all markets.

“We have added over 18,000 people in the first six months of this financial year, including over 11,150 campus trainees. We remain on course to meet our annual hiring target of 30,000 to 35,000 professionals and have made 24,500 campus offers for the next financial year,” said Ajoy Mukherjee, Vice President, Head, Global Human Resources.

During Q2, there was a gross addition of 9,682 employees (net 5,328) of which 6,673 were trainees and 1,587 were lateral recruits in India and 1,422 employees were added in overseas subsidiaries and branches. The total employee base is 121,610 professionals and 52% of the workforce has more than three years experience.

The utilization rate (excluding trainees) improved to 81.1% and the attrition rate in Q2 was at 13.2% overall with 12.4% attrition rate in the IT services business and 22.7% attrition rate in BPO. Foreign nationals formed 9.2% of the total employee base and 29% were women.

Key Wins

Full Services outsourcing deal with a large electronic retailer in Europe.
Multi-year, Transformational BPO deal with a North American Financial Services organization.
Multi-year deal for end-to-end business process transformation of passport issuance for the Ministry of External Affairs, Government of India.
Preferred partner for ERP consolidation program of a leading pharmaceutical and healthcare company.
Five-year contract to render ADM services for a leading bank in Europe.
A leading financial institution in the Middle East has chosen TCS BαNCS for their multi-market online trading and asset management business.
TCS BαNCS has been selected by one of the largest banks in Latin America as their core banking platform across five regional countries

About Tata Consultancy Services Ltd (TCS)

Tata Consultancy Services is an IT services, business solutions and outsourcing organization that delivers real results to global businesses, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled services delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development.

A part of the Tata Group, India’s largest industrial conglomerate, TCS has over 120,000 of the world's best trained IT consultants in 42 countries. The Company generated consolidated revenues of US $5.7 billion for fiscal year ended 31 March, 2008 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at www.tcs.com.

Kedar.shirali@tcs.com
Mobile: +1 917-435-4779, +91 9820826127

Media: +9122 6778 9999

Pradipta.bagchi@tcs.com
shamala.p@tcs.com
Ashish.babu@tcs.com
hramachandra@vccpl.com (+91 9867035853)