TCS profit rises 12% to Rs 12,434 crore in Q4, misses estimates

TCS Q4 earnings: Tata Consultancy Services (TCS), the country's largest information technology services company, on Friday reported net profit of Rs 12,434 crore in March quarter, marking an upside of 12 per cent from Rs 11,058 crore in the previous quarter. On an annual basis, TCS profit rose 9.14 per cent from Rs 11,392 crore.

TCS' revenue from operations rose 1.07 per cent sequentially and 3.50 per cent annually to Rs 61,237 crore, missing analysts' expectation of Rs 61,563 crore, as per data compiled by LSEG.

In the last quarter, TCS booked new orders worth $13.2 billion.

Company's growth in last quarter of financial year 2023-24 was led by India business which rose by 37.9 per cent, UK business which grew by 6.2 per cent and manufacturing vertical which advanced 9.7 per cent. Its operating margin came in at 26 per cent, registering an annual expansion of 150 basis points while net margin expanded 100 basis points to 20.3 per cent.

The company announced fianl dividend of Rs 28 per share.

“We are very pleased to close Q4 and FY24 on a strong note with the highest ever order book and a 26% operating margin, validating the robustness of our business model and execution excellence. In an environment of global macro uncertainty, we are staying close to our customers and helping them execute on their core priorities with TCS’ portfolio of offerings, innovation capabilities and thought leadership,” said K Krithivasan, Chief Executive Officer and Managing Director of TCS.

“Our Q4 performance is robust, with broad based deal wins across industries and geographies. Our products and platforms business sparkled with the mega deal win at Aviva and emerging markets had another stellar growth quarter demonstrating the power of TCS’ diversified portfolio,” said N Ganapathy Subramaniam, Chief Operating Officer and Executive Director.

In a challenging macro environment, clients are prioritizing initiatives that reduce cost, increase business agility, improve security posture and resilience. Win themes across key deals involved Cloud Migration and Modernization, GenAI, Enterprise application services, Identity & Access Management, Connected Devices, Digital Workplace Services, Network Services and Vendor Consolidation. AI.Cloud, Enterprise Solutions, IOT&DE and Cyber Security led the growth this quarter, TCS said in a press release.

The industry has been accepting tougher contract terms to win large deals as they compete for fewer orders and also grappling with clients renegotiating, delaying or cancelling contracts, resulting in a sharp slowdown in the industry's growth from the pandemic-fuelled boom a few years back.

For financial year 202-24, TCS' order book total contract value (TCV) surged to an all-time high of $42.7 billion and its full year revenue rose 6.8 per cent and 3.4 per cent in constant currency terms to Rs 2,40,893 crore.

Energy, resources and utilities, manufacturing and life sciences & healthcare were the key vertical growth drivers in FY24.

“We are pleased to announce the annual increments for our workforce, as we have done consistently every year, with top performers receiving double digit hikes. The reduced attrition at 12.5%, enthusiastic response to our campus hiring, increased customer visits and employees returning to the office have resulted in great vibrancy in our delivery centres and elevated morale of our associates," said Milind Lakkad, Chief HR Officer

TCS shares ended 0.45 per cent higher at Rs 4,000.30, ahead of its earnings announcement.