TCS Q4 Results: Tata Consultancy Services (TCS) on Friday announced a robust 9.3 per cent YoY jump in Q4 profit at Rs 12,502 crore as against Rs 11,436 crore profit in the same quarter last fiscal, surpassing estimates. The IT services major has reported Q4 revenue growth of 3.5 per cent YoY at Rs 61,237 crore in comparison to Rs 59,162 crore. According to a CNBC TV18 poll, TCS was expected to record Q4 profit at Rs 12,080 crore and revenue was estimated at Rs 61,400 crore.
The company said growth is led by 37.9 per cent growth in the India market followed by the UK (+6.2 per cent). The manufacturing sector’s contribution to revenue growth is up 9.7 per cent YoY. In terms of verticals, TCS said, growth was led by Energy, Resources and Utilities (+12.6 per cent), Manufacturing (+7.3 per cent), and Life Sciences & Healthcare (+4.8 per cent).
The operating margin saw 26 per cent growth YoY with expansion of 150 bps while net margin saw 20.3 per cent growth YoY following 100 bps expansion. The company board also announced a final dividend of Rs 28 per equity share of Re 1 each of the company, which it said, shall be paid/dispatched on the fourth day from the conclusion of the 29th Annual General Meeting.
TCS recorded deal wins with the fourth quarter TCV at $13.2 billion and FY24 order book TCV stood at an all time high of $42.7 billion.
K Krithivasan, Chief Executive Officer and Managing Director, said, “We are very pleased to close Q4 and FY24 on a strong note with the highest ever order book and a 26 per cent 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.”
N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, said, “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.”
Research and Innovation
As on March 31, 2024, TCS said that it has applied for 8,040 patents, including 188 applied during the quarter, and has been granted 3,919 patents including 461 granted during the quarter.
TCS’ workforce
TCS’ workforce stood at 601,546 as on March 31, 20244. The employee base, it said, is very diverse, with 35.6 per cent women and with 152 nationalities. Milind Lakkad, Chief HR Officer, said, “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 per cent, 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.”
Year till date, TCSers have clocked 51 million learning hours, and acquired 5 million competencies. Samir Seksaria, Chief Financial Officer, said, “In FY 2024, our disciplined approach to operations have helped us expand our industry-leading margins. In a challenging environment, we persisted with our long-term investments in workforce reskilling, research and innovation. We will continue to drive efficiencies and competitiveness to capture opportunities for growth with profitability.”
Analyst take
Reacting on TCS’ quarter performance, Biswajit Maity, Sr Principal Analyst, Gartner, said, “TCS’s greatest strength is its customer centricity, and it invests in developing deep, trusting and long-standing relationships with its clients. This takes time but yields TCS the ability to sell into customer C-suites. These characteristics contributed to their positive growth momentum.”
Gartner revised its forecast for global IT spending in the fourth quarter of 2023 slightly downward by less than 1 per cent for both 2023 and 2024. “The year 2023 witnessed unexpected developments across various sectors, marking it as a year of surprises on multiple fronts. The first half of 2023 began slowly with delayed and prolonged contract signings, and the anticipated improvements and acceleration in the latter half of the year failed to materialize due to factors such as the hype surrounding AI, frozen spending, and change fatigue among CIOs. Despite this, overall activity remained stable in most firms, with CIOs utilizing budgets before year-end. Consequently, some of these late-allocated budget funds will be reflected as spending in 2024. Looking ahead, there is an expectation of a return to IT growth, which will impact all major IT firms, including TCS. As expected, TCS showed robust momentum with a year-over-year growth in profit percentage,” added Biswajit Maity.