TCS net profit rises 24%; UK tops revenue growth

India’s tech flagship, Tata Consultancy Services, has opened the third earning quarter season for the industry on Thursday posting numbers that met analysts’ and market expectations.

TCS reported a 24 per cent year-on-year growth in its third quarter (October-December) net profit at Rs 8,105 crore, against Rs 6,531 crore in the corresponding quarter last year. On a quarter-on-quarter comparison, its net profit grew 2.58 per cent. During the period, the company raked in total revenues of Rs 37,338 crore, an annual increase of 20.8 per cent and a QoQ increase of 1.3 per cent.

Rajesh Gopinathan, chief executive officer and managing director of TCS, said, “We are wrapping up 2018 with a strong revenue growth of 12.1 per cent in the December quarter, which is the highest in 14 quarters, with continued growth acceleration in key verticals and across all geographies. The strong client metrics, industry leading growth in digital services, a very strong order book and deal pipeline are all validations that customers recognise our differentiated capabilities and are picking us for their growth and transformation programmes.”

The company’s revenue in constant currency terms increased 12.1 per cent YoY, the highest in 14 quarters while the constant currency revenue growth was 1.8 per cent QoQ. The bottomline growth was driven by other income (up 59 per cent QoQ) but limited by weak operational performance.

Revenue in dollar terms was higher by 0.67 per cent QoQ at $5,250 million in Q3FY19 and constant currency growth stood at 1.8 per cent against 3.7 percent in the previous quarter.

Also, TCS board has declared an interim dividend of Rs 4 per equity share.

Offering a commentary on performances of various verticals the company said, revenues from BFSI (Banking, Financial Services and Insurance) 0.5 per cent QoQ to Rs 14,722 crore, while its Ebit fell 4 per cent to Rs 4,021 crore. Manufacturing revenue grew 1 per cent to Rs 3,958 crore against Rs 3,919 crore during the previous quarter. Manufacturing Ebit grew 6.6 per cent at Rs 1,162 crore. Revenue from retail vertical has grown 1.6 per cent at Rs 6,994 crore against Rs 6,348 crore quarter-on-quarter. Retail Ebit fell 4 per cent at Rs 1,726 crore quarter-on-quarter. The communication and media vertical brought in revenue of Rs 6,090 crore, a 1 per cent increase over Rs 6,009 crore QoQ.

The company’s key growth was led by UK (+25.1 per cent), Europe (+17.6 per cent), and Asia Pacific (+12.6 per cent). North America grew 8.2 per cent, India grew 9.7 per cent and Latin America grew 7.6 per cent.

When the industry is generally following a

job-less growth regime, TCS has reported an impressive net addition 6,827 people during Q3, taking the total employee strength to 417,929.