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TCS net income jumps 10.8% to Rs 8,131 crore

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NEW DELHI: Largest software exporter TCS on Tuesday reported a 10.8 percent rise in June quarter net at Rs 8,131 crore and said focus will be on maintaining double-digit revenue growth in the rest of the year.

The Tata Group cash machine reported a revenue growth of 11.4 percent to Rs 38,172 crore during the quarter, which on a constant currency basis clipped at 10.6 percent.

Bottomline has been hit a tad due to currency appreciation, and Tata Consultancy Services (TCS) said without quantifying it and termed currency depreciation as “intrinsic” to its business model and pointed out that future currency movements will determine if it can get the operating profit margin in the aspirational band of 26-28 percent.

Managing director and chief executive Rajesh Gopinathan said in FY18 revenue growth had slipped to below 10 percent, which recovered to double-digits in FY19 and said he is not looking at faster pace of topline growth.

“I am really not looking for acceleration, but looking for sustaining the double-digit growth level going forward,” he told reporters announcing the numbers.

It can be recalled that the industry lobby Nasscom has stopped the practice of announcing yearly growth targets for the industry. The industry grew at 9 percent in FY19. TCS is the first company to announce the June quarter earnings.

He said the deal momentum is good and it was able to close the quarter with USD 5 billion worth of new deals, which include four clients in the USD 100 million-plus bracket.

From a profitability perspective, operating margin came in at 24.2 percent for the reporting quarter impacted by rupee gains and the higher wage bills.

Chief financial officer V Ramakrishnan, without offering a break-up, said there was a 2.4 percentage point impact from currency appreciation and the impact of the annual wage hikes granted to its 4.36 lakh employees, while operating efficiencies cushioned the overall impact at 0.88 percent compared to the preceding quarter. But he

Whether it will be able to meet its aspiration of getting the margin into the 26-28 percent bracket, he said currency can be the “spoiler”.

“We’ve always said some amount of currency depreciation is intrinsic to our business. We have seen a lot of currency appreciation off late, so that can be a spoiler,” he said.

From a segmental perspective, Gopinathan said there is softness in the capital markets segment, especially across continental Europe. The comments come two days after German financial powerhouse Deutsche Bank announced a shuttering its equity business globally.

But he said banking, finance and insurance segment revenue grew 9.2 percent on an annualised basis, while it was able to increase the same from life sciences by 18 percent.

Revenue from the fast growing digital stream clipped past 42 percent to command one-third of its total revenue flow with a 32.2 percent share, he said, adding over 3.15 lakh employees have already been trained on digital technologies.

Gopinathan said manufacturing is a mixed bag with companies– in its largest market of the US– doing well, while Europe and Britain are a drag on the overall growth. On retail, he said it was a one-off quarter with setbacks like early closure by clients like Sears.

On the budget proposals, especially those on taxing share buybacks, which is a popular option of returning excess cash adopted by IT companies in the past few years to shareholders, Gopinathan said the capital allocation policy continues but the “route and mechanism” of returning the cash will be looked at later.

He did not directly comment on the proposal to cap promoter holding at 65 percent, but made it clear that TCS will not go for reduction in the holding by issuing new shares. The Tata Group owns 75 percent in TCS, which contributes around 85 percent of the group profit.

Newly-appointed human resources head Milind Lakkad asserted that they are the biggest job creator among Indian companies in the US, and said while H1-B visa concerns are real, they are not a constraint.

The company added 12,000 employees on a net basis during the quarter, which is the highest in five years, and Gopinathan said more will be added in the quarters ahead from the 30,000 offers made to freshers.

The attrition level went up by a notch to 11.5 percent during the quarter, which Lakkad attributed to seasonal factors like implementation of wage hikes.

The company said it has applied for 86 patents during the quarter, taking the overall patents applications to 4,682 as of end June 2019, and has been granted 1,022 patents.

Sanjoy Sen, a senior research fellow on strategy and governance at Britain’s Loughborough University said TCS has exceeded market expectations with the numbers amid the uncertain macro environment.

“Whatever success achieved is clearly down to TCS’ successful implementation of strategy and operational performance,” he said in a statement.

Ahead of the earnings announcement in the evening, the TCS counter closed 2.05 percent down at Rs 2,131.45 on the BSE which closed flat.

Source: Press Trust of India

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63 moons to provide next-gen tech to Italian firm; eyes pan-European markets

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NEW DELHI: 63 moons technologies, formerly known as Financial Technologies, on Tuesday said it will provide next-generation technology solutions to Italy-based Spuma SRL as it targets pan-European markets.

In addition, 63 moons said it will evaluate global giants in cloud computing services like Amazon’s AWS, Microsoft’s Azure and Google cloud for deploying the technology, the provider of technology solutions to financial markets said in a regulatory filing to the BSE.

63 moons provides next-generation technology ventures and solutions for creating digital markets and marketplaces that enable price discovery and transaction efficiencies across industry segments.

The announcement comes a day after 63 moons said that it will not provide technology support to Multi Commodity Exchange (MCX) after September 30.

As per the filing, Spuma SRL will leverage 63 moons’ expertise on real-time mission critical solutions, using the latest technology suite.

The company will be offering a SaaS (Software-as-a-Service) model with earnings by way of share in revenue by transaction charges and services earned by the digital ecosystem, which is its innovative model for high-growth IP monetization similar to Indian exchanges.

The company said it “would back and boost Italy-based Spuma SRL, with its next generation technology capabilities and solutions to create a digital market ecosystem for revitalised goods in the pan-Europe multi-million euro project and offering efficient and high value procurement and exchange proficiencies of revitalised goods”.

Spuma SRL will be offering these services initially from Italy, followed by extending to all the European Union countries and users of the platform.

63 moons would be offering technology support for the production, installation, and maintenance of the software application for the entire project, while the remaining operational functions will be carried out by Spuma SRL.

Source: Press Trust of India

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Realme DIZO partners OEL to make smartwatches, audio wearables in India

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NEW DELHI: Smart devices maker Realme DIZO has partnered with electronic manufacturing services company Optiemus Electronics Limited to manufacture smartwatches and audio wearables in India.

DIZO is a global technology brand and already has its presence in several other countries. However, India is the most important market for the brand, the company said in a statement.

“We have been talking about local manufacturing since the beginning and today, this dream is realised too and we are very excited about the future. Our alliance with Optiemus Electronics Limited (OEL) only supports our commitment towards India and Indian consumers.

“We are positive that through this partnership, we will be able to bridge the gap of making more futuristic AIoT (Artificial intelligence of things) and lifestyle products for the growing consumer needs,” DIZO India CEO Abhilash Panda said.

The brand has already started manufacturing some of its products, including DIZO Watch D, here in India and will eventually move to production of the other DIZO products – existing and upcoming ones in phases.

“From selling out products within minutes of the first sale to touching 1 million consumer base in just 5 months of inception to being rated as one of the top five smartwatch brands and fastest growing brands in audio wearables, our journey has been nothing less than a dream come true,” Panda said.

Since its inception, DIZO has launched over 30 products, including smartwatches, earbuds, neckbands, beard trimmers, hair dryers, feature phones and smartphone accessories.

In terms of product categories, DIZO will focus on entering into smart entertainment, smart home, smart care, and accessories for its consumers, the statement said.

Source: Press Trust of India

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Singtel arm sells 1.59% stake in Bharti Airtel for Rs 7,261 crore

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NEW DELHI: Pastel Ltd, an entity of Singtel, on Thursday divested 1.59 per cent stake in Bharti Airtel for Rs 7,261 crore through an open market transaction.

The stake has been picked by Bharti Airtel’s promoter Bharti Telecom Ltd, as per block deal data with the National Stock Exchange (NSE).

According to the data, Pastel offloaded 9,40,00,000 shares, amounting to 1.59 per cent stake in the company.

The shares were disposed of at an average price of Rs 772.5 apiece, taking the transaction value to Rs 7,261.50 crore.

Pastel Ltd is a unit of Singapore Telecommunications Ltd (Singtel).

Post this transaction, Pastel’s shareholding in Bharti Airtel will decrease to 10.62 per cent from 12.21 per cent.

At the end of the June quarter, Pastel held 13.84 per cent stake in the firm, shareholding data with the bourse showed.

Bharti Group Chairman Sunil Bharti Mittal’s family and Singtel are co-investors in Bharti Telecom Ltd (BTL).

In early September, Singtel entities had jointly sold a 1.76 per cent stake in Bharti Airtel for about Rs 7,128 crore, while its co-promoter Bharti Telecom Ltd bought 1.63 per cent stake from Pastel for Rs 6,602 crore.

Last month, Singtel announced that its affiliates have entered into an agreement to transfer approximately 3.33 per cent stake to BTL for an aggregate amount of approximately 2.25 billion Singapore dollars (SGD), leaving direct shareholding of Singtel and Bharti in Airtel at around 10 per cent and 6 per cent, respectively.

Bharti Telecom at present holds 35.85 per cent stake in the country’s second-largest telecom service provider Bharti Airtel.

Source: Press Trust of India

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