Tata Consultancy Services (TCS), India’s largest software firm, has posted a 5.03% sequential rise in net profit at ₹11,392 crore in a seasonally weak quarter ended March 31, riding on large deals from across sectors and geographies. However, the IT major reported a muted revenue growth during the quarter as discretionary spends by clients were “on hold”.

In comparison, the Tata Group company had posted a net profit of ₹10,846 crore during the quarter ended December 2022. During the reporting quarter, the company’s revenues rose by a meagre 1.6% to ₹59,162 crore from ₹58,229 crore recorded in the sequential third quarter. This was its slowest constant currency revenue growth in 11 quarters.

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A consensus estimate by Bloomberg had pegged the company to post a net profit of ₹11,540 crore on revenues of ₹59,418 crore.

“The growth in fourth quarter was led by the UK, which posted an exceptional growth of 17%, while North America grew 9.6% and Continental Europe grew 8.4%. Among the emerging markets, Latin America grew 15.1%, India grew 13.4%, Middle East & Africa grew 11.3% and Asia Pacific grew 7.5%,” TCS CEO and MD Rajesh Gopinathan said on Wednesday.

“North America has slowed down in the last quarter, but it’s due to a cautious spending outlook by clients. The North American market did not bounce back as expected after the seasonally weak third quarter, other markets have grown all expected lines,” he added.

CEO designate K Krithivasan, who has been appointed for a period of five years, will take over from June 1. Krithivasan will succeed Gopinathan, who resigned in March to pursue other opportunities. Gopinathan will continue to be associated with the company as an advisor till September 15.

“Krithi and I are working closely to ensure that the leadership transition over the next few months is smooth and seamless to all our stakeholders and that TCS is well positioned to capture the opportunities ahead,” the outgoing CEO said.

Krithivasan said the demand environment was good and the company’s fourth quarter order book position of $10 billion Total Contract Value (TCV) is on back of all-time high number of large deals.

TCS posted a 14.7% y-o-y rise in net profit from ₹9,926 crore posted in the same quarter a year ago, while revenues rose 16.9% from ₹50,591 crore.

For the fourth quarter, TCS’ operating margins stood at 24.5%, compared with 24.1% a year ago. Its net margins stood at 19.3% in Q4, expanding from 18.6% of the preceding quarter.

“FY23 was a year of transition, as supply-side challenges abated while pandemic-depressed travel and discretionary spends normalised. We navigated this change well, without slowing down our investments in our people, research and innovation and intellectual property. Our longer-term competitiveness remains intact, giving us industry-leading profitability even as we pursue our growth aspirations,” TCS CFO Samir Seksaria said.

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“During Q4 and through the year, we successfully delivered transformation programmes of varying size and scale. Cloud and Data continue to generate huge demand both internally from a talent perspective and externally from a solutions point of view. We are embracing Artificial Intelligence and machine learning ML holistically in our execution methods to leverage the huge data and metrics that we have on our delivery performance over decades, to generate insights and raise the bar on quality and experience to our clients,” TCS chief operating officer and executive director N Ganapathy Subramaniam said.

TCS has also started incorporating generative AIs such as ChatGPT in its products, he added.