Tata Consultancy Services (TCS) on Friday reported a 0.2 per cent year-on-year (YoY) rise in its consolidated net profit at Rs 8,118 crore for the third quarter of the current fiscal. (Q3FY20). Sequentially, the numbers grew 0.94 per cent.
Revenue for the quarter came in at Rs 39,854 crore, up 6.7 per cent YoY while in constant currency terms, revenue grew 6.8 per cent YoY.
The company also announced interim dividend of Rs 5, record date of which has been fixed on January 25 while the payment date is January 31.
Total income during the quarter under review stood at Rs 40,672 crore, up 5.63 per cent YoY. Basic and diluted earnings per share (EPS) of the company stood at Rs 21.63, up 0.13 per cent YoY.
The company’s operating margin stood at 25 per cent. Net cash from operations stood at nearly Rs 9,451 crore which was 116.4 per cent of net income.
“We saw the sectoral trends of the first half of the year continue to play out in the third quarter. Our robust order book during the quarter reflects our ability to pitch innovative technology solutions to address the business needs of different stakeholders in the enterprise, and participate in our customers’ enterprise-wide transformation initiatives. This is also helping deepen and broaden our customer relationships, and make the business more resilient,” said Rajesh Gopinathan; Chief Executive Officer and Managing Director.
Industry-wise, revenues from Banking, Financial Services and Insurance (BFSI) segment stood at Rs 15,483 crore, up 5.16 per cent YoY while Manufacturing grew 5.3 per cent. Revenues from Retail and Consumer Business stood at Rs 6,709 crore, up 4 per cent. Communications segment revenue stood at Rs 6,608 crore, up 8.5 per cent YoY.
Life Sciences & Healthcare continued to outperform as the segment grew 17 per cent YoY.
Addressing the media post results announcement, TCS CEO Rajesh Gopinathan said that BFSI is a complex area and UK and US continue to remain challenging for the vertical. Traditional retailers are increasing their competitieveness and Retail could see a turnaround.
“In a seasonally weak quarter characterized by furloughs across multiple industry verticals, we focused on execution, while
continuing to invest for future growth. Having onboarded over 30,000 trainees in the first half of the year, we worked on driving up utilization in Q3 and had good outcomes. Our client metrics were also very good, with additions across most revenue buckets,” said N Ganapathy Subramaniam, Chief Operating Officer & Executive Director.
“Our large core transformation engagements are all progressing very well. At M&G Prudential as well as at Scottish Widows, we crossed important transformation milestones, successfully migrating hundreds of thousands of policies from legacy systems onto our platform, significantly enhancing the customer experience for those policy holders. These are industry-defining engagements,
closely watched by other insurance companies. Our achievement of these key milestones adds further impetus to their own transformation plans,” Subramaniam added.
Geographically, growth was led by Europe (+15.9%) and Middle East and Africa (MEA) (+10.8%) and UK (+7.5%). North America and Asia Pacific grew 4.1 per cent and 5.7 per cent, respectively. India grew 6.4 per cent while Latin America grew over 6.2 per cent.
On year-to-date (YTD) basis, TCS saw net addition of 22,390 employees. IT Services attrition rate stood at 12.2 per cent last twelve months (LTM). The company said that 93 per cent of the 30,000 freshers onboarded in first half of the fiscal has been deployed in projects.