TCS December Quarter Profit Rises 4% To Rs 10,846 Crore On Strong Cloud Demand

The country's largest information technology company, Tata Consultancy Services (TCS), on Monday said that its profit in October-December period or third quarter of current financial year rose 4 per cent sequentially to Rs 10,846 crore as against Rs 10,431 crore in the previous quarter and up 11 per cent from Rs 9,769 crore during the same period last year. The up move in profit came on the back of strong demand for cloud computing services. 

"TCS’ cloud units continued to see very strong growth led by services for cloud migration and modernization, hybrid cloud adoption, managed services and governance," the company said in a stock exchange filing.

Its revenue from operations rose 5.27 per cent to Rs 58,229 crore as against Rs 55,309 crore in the previous quarter. The company registered annual increase of 19.1 per cent and its revenue in constant currency terms grew at 13.5 per cent annually.

Among major markets, North America and UK led with 15.4 per cent growth; Continental Europe grew by 9.7 per cent. In emerging markets, Latin America grew 14.6 per cent, India grew at 9.1 per cent, Asia Pacific grew 9.5 per cent and Middle East & Africa grew 8.6 per cent, TCS said.

During the quarter TCS' order book stood at $7.8 billion.

“We are pleased with our strong growth in a seasonally weak quarter, driven by cloud services, market share gains through vendor consolidation, and continued momentum in North America and UK. The sustained strength of demand for our services is a validation of the value we provide to our clients in helping them differentiate themselves, while enhancing their competitiveness. Looking ahead, and beyond current uncertainties, our longer-term growth outlook remains robust,” said Rajesh Gopinathan, chief executive officer and managing director.

TCS’ operating margin contracted by 0.5 per cent annually to 24.5 per cent. 

The company said that its attrition is on a declining trend and currently at 21.3 per cent. The company had 613,874 at the end of December quarter with 35.7 per cent women employees from 153 nationalities.

The company announced an interim dividend of Rs 75 per share which includes Rs 67 as special dividend. The company has so far this year paid Rs 33,297 crore to its shareholders.

“As I look back at 2022, it’s gratifying to see the privileged partnership that we continue to enjoy with our clients globally. In a hybrid working model we delivered many complex transformation programs tailored to the specific needs of our clients’ ecosystem with speed and agility. It’s also refreshing to see our delivery centres and PacePort labs busy with our consultants and client executives jointly reimagining solutions to deliver the future, now. The year also saw us embracing data, AI and ML holistically to disrupt ourselves and drive competitive advantage to our clients’ businesses. All these augur well for our future as we step into 2023,” said N Ganapathy Subramaniam, chief operating officer and executive director.

TCS shares ended 3.35 per cent higher at Rs 3,319.70 ahead of its earnings announcement.