TCS to acquire French firm Alti for Rs 533 cr

New Delhi: Tata Consultancy Services (TCS), India’s largest IT services provider, today said it would acquire France-based Alti SA for euro 75 million (around Rs 533 crore) in an all-cash deal.

The impact of the announcement was evident on the company’s stock, which rose two per cent intra-day on BSE to Rs 1,512 a share, before closing at Rs 1,497 — up 1.1 per cent.

The acquisition, one of the largest for TCS in continental Europe and one of the first by a large Indian IT player in France, signifies how the firm wants to increase its presence in the region beyond the UK.

BNP Paribas was TCS’ sole advisor for the deal.

Alti SA is a privately-held company, owned by its management and two private equity funds — CM-CIC LBO Partners and IDI — which supported its growth from a revenue base of euro 64 million (around Rs 455 crore) in 2007 to euro 126 million (around Rs 895 crore) in 2012. The firm is considered among the five top system integrators of enterprise solutions in France. Its key customers include several top French corporations in banking, financial services, manufacturing, utilities and luxury sectors.

“This acquisition underlines our long-term, strategic commitment to France, which is the third-largest IT services market in Europe. The acquisition would help us serve our clients in France and across Europe more comprehensively, with an expanded set of services and solutions, bringing the best of TCS to French corporations,” said TCS CEO & MD N Chandrasekaran.

TCS has managed to acquire Alti for a discount to its revenue, reflecting the valuation pressure several European companies are facing. “Valuations of European firms, especially in France and Germany, are very attractive. And, the IT firms sitting on cash piles would make use of this opportunity. If you look at comparable multiples of these firms today, those are very low,” said an investment banker on the condition of anonymity.

The acquisition would give TCS a large presence in Europe — France, Belgium Switzerland and Algeria — with an employee base of 1,200.

TCS is fourth most-valued IT services brand globally

Mumbai: Tata Consultancy Services (TCS) has been named as the world’s fourth most valuable information technology (IT) services brand by leading global brand valuation company Brand Finance. The top three most-valued IT services brands are IBM, HP and Accenture.

“The value of the TCS brand has increased rapidly over the past three years. Our 2012 ranking marks the first time an emerging market-headquartered firm has entered the top league in IT services. With a strong brand strategy and a refined sponsorship portfolio, TCS has been able to improve both brand awareness and its profile globally,” said David Haigh, chief executive officer and founder of Brand Finance.

Brand Finance assesses the dollar value of the reputation, image and intellectual property of the world’s leading companies.

TCS, India’s largest IT services provider, has been investing heavily to build up its brand presence worldwide through a range of activities, including a global public relations programme, major sports sponsorships and corporate social responsibility activities. The company’s portfolio of sports partnerships over the past five years has cut across Formula 1 racing, Pro cycling, cricket and running, while its community initiatives have ranged from health and wellness to youth education and environment conservation initiatives.

“We are extremely pleased with this ranking, as it confirms the rapid evolution and recognition of our brand at a global level. In line with the symbolic crossing of the $10-billion revenue mark this year and the global top four position TCS now holds in terms of market capitalisation, net income and employees, this achievement on the brand front is a watershed moment in our company’s evolution towards a top position in its industry globally,” said N Chandrasekaran, chief executive officer and managing director of TCS.

Philip Kotler, S C Johnson and Son Distinguished Professor of International Marketing at the Kellogg School of Management, Northwestern University, said: “Unreported on most balance sheets, brand value and reputation yet remain the most important assets for a company in today’s hyper-competitive globalised marketplace. In this Marketing 3.0 world, successful modern brands need to reach out not only to the hearts and minds, but also the spirits of their target audience. TCS is clearly a company that is getting this right, reflected in significant gains to its brand equity, value and reputation.”

Infosys, India’s second-largest IT services company, is on the fifth position, while Cognizant and Wipro are on the ninth and 10th position, respectively.

TCS beats $10-bn revenue mark in FY12

Mumbai: For India’s largest IT services firm Tata Consultancy Services (TCS), the fourth-quarter and annual results for financial year 2012 were about setting milestones. TCS became the first IT services company in the country to cross the $10-billion mark (according to IFRS) in revenues for the year ended March 31. By reporting a 22.6 per cent increase in its net profit on a year-on-year basis for the fourth quarter ended March, TCS gave an upbeat outlook and reiterated it was better placed to manage growth compared to its peers, especially Infosys.The better than expected numbers also put to rest some of the concerns over the demand environment for IT services.

“We have good momentum. We have a good pipeline and the traction in business is positive. We do see a good year ahead and we are sure growth for the next fiscal will be even across quarters,” said CEO & MD N Chandrasekaran. Though the company does not give any guidance, Chandrasekaran said it would do better than the Nasscom prediction of growth for the industry at 11-14 per cent.

TCS saw its revenues rise to Rs 13,259.30 crore in the quarter under review with y-o-y growth of 30.5 per cent, backed by ramping up of existing clients and steady growth of its business across major geographies.

The company’s growth during the quarter was also driven by a volume growth of 3.3 per cent. In US dollar terms, the company's revenue for the full year was $10.17 billion.

In the results announced so far by tier-1 IT services firms, TCS sounded far more bullish than Infosys and HCL Technologies on the demand environment. While both Infosys and HCL indicated discretionary spends were going to be an area of concern and already there were some project ramp-downs, the TCS management said discretionary spends had been easing since Feburary.

On a sequential quarterly basis, the company’s net profit went up marginally by 1.6 per cent and revenues grew 0.4 per cent.

"The TCS results were in line with estimates on the revenue and profit fronts. The 3.3 per cent volume growth was encouraging in a tough macro environment,” said Dipen Shah, head of fundamental research, Kotak Securities.

Margins for the quarter decreased 155 basis points (bps) to 27.7 per cent. This was largely due to the negative 71-bp impact of forex loss (Rs 125 crore) and an 11-bp fall due to offshore moves. During the quarter, the company's productivity was up 47 bps.

TCS, Cognizant, Infosys, Wipro and HCL Technologies on hiring overdrive

Chennai: The hiring numbers of IT majors leave nothing to doubt about how far the companies have left behind the recession.

From the quarter ended March 31, 2010 to the one ended December 31, 2010, the top 5 IT majors in India--Tata Consultancy Services (TCS), Cognizant , Infosys , Wipro and HCL Technologies .-together clocked a staggering figure of 1,14,038 net additions in terms of headcount. This stands in sharp contrast to the net addition figure of 47,462 in the corresponding year ago period.

Net addition subtracts the number of people leaving the company from the gross additions, and, therefore, is a better indicator of the actual increase in staff numbers.

"It reflects the buoyancy in the market. 2009 numbers show the uncertainty and the low sentiments prevailing at that point. Companies are feeling a lot more confident now and can afford some redundancy in anticipation of big projects which wasn't the case earlier," said E Balaji, MD and CEO, MaFoi Randstad, a HR consulting firm.

The numbers have shown a marked increase for each of the big IT companies. The net addition of TCS for the period from March quarter to the December quarter in 2010 was 37,260 which is almost double the figure of 19,311 clocked in the year ago.

Cognizant's net addition numbers increased from 16,700 in 2009 to 25,557 in 2010. Much bigger increases were seen for the other 3 IT majors-Infosys, Wipro and HCL Technologies. The same numbers for Wipro for instance, increased from 3,977 in 2009 to 16,745 in 2010; for HCL Tech, the number rose from 670 to 16,579; and for Infosys, from 6,804 to 17,897.

"During recession, companies weren't recruiting freshers. So there was a deficit, especially at lower levels. So what is happening now is that companies are replenishing the stock, with freshers accounting for a big part of it. The higher attrition in the current buoyant mood in the market is also playing a role in increasing these hiring numbers," said Amitabh Das, CEO of Vati Consulting , a recruitment firm.

Not only are the companies compensating for the lull in hiring, they also anticipate bigger and more valuable projects in the coming times. They are building up bench strengths to handle the bigger size and variety of projects they expect to come their way.