Last Updated : Jan 10, 2019 06:00 PM IST | Source:

TCS Q3 profit rises 2.6% to Rs 8,105 cr, constant currency revenue growth at 1.8% meets expectations

TCS' revenue during the quarter grew by 1.3 percent quarter-on-quarter to Rs 37,338 crore in October-December quarter.

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Software firm Tata Consultancy Services has reported a 2.6 percent sequential growth in December quarter profit at Rs 8,105 crore, with constant currency revenue growth of 1.8 percent QoQ meeting analyst expectations on Thursday.

The bottomline growth was driven by other income (up 59 percent QoQ), but limited due to weak operational performance. The company had reported a profit at Rs 7,901 crore in quarter ended September 2018.

Revenue during the quarter grew by 1.3 percent quarter-on-quarter to Rs 37,338 crore in October-December quarter, the country's largest IT services exporter said in its filing.

The year-on-year growth in profit was 24.1 percent, and revenue in constant currency terms increased by 12.1 percent YoY, the highest in 14 quarters.

"We are wrapping up 2018 with a strong revenue growth of 12.1 percent in the December quarter, which is the highest in 14 quarters, with continued growth acceleration in key verticals and across all geographies," Rajesh Gopinathan, Chief Executive Officer and Managing Director said, adding though it had a seasonally weak quarter.

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

"The strong client metrics, industry leading growth in digital services, a very strong order book and deal pipeline are all validations that customers recognize our differentiated capabilities and are picking us for their growth and transformation programs," Gopinathan said.

Digital revenue contribution in Q3 increased to 30.1 percent against 28 percent in previous quarter.

"We added one more customer in $100 million band QoQ & eight YoY. The total contract value of order closure stood at $5.9 billion in Q3 against $4.9 billion in Q2," said Gopinathan while addressing press conference.

He further said despite some impact in UK & Europe, BFSI (banking, financial services, insurance) continued to accelerate growth trajectory and there was broad-based growth across insurance segment.

BFSI business, which contributes around 40 percent to total revenue, grew by 0.5 percent sequentially but its EBIT (earnings before interest and tax) degrew 4.4 percent.

Manufacturing segment registered a 1 percent sequential growth in Q3 revenue and 6.6 percent in EBIT.

Retail business showed a 1.6 percent QoQ growth in revenue but its EBIT fell 4 percent while communication and media segment reported a 1.3 percent growth but its EBIT also dropped 2.5 percent in quarter ended December 2018.

Operational performance was weak for the quarter as EBIT (earnings before interest & tax) declined 2.12 percent sequentially to Rs 9,564 crore in Q3FY18 and margin contracted to 25.6 percent against 26.5 percent in September quarter.

"Despite headwinds from the rupee volatility against various currencies, and the higher cost of doing business in some major markets, operating margins have been resilient," V Ramakrishnan, Chief Financial Officer said.

TCS (net) added 6,827 employees in Q3, taking the total strength to 4,17,929 on a consolidated basis. The IT services attrition rate (last twelve months) was 11.2 percent.

The company announced an interim dividend of Rs 4 a share for the year 2018-19.

The scrip of Tata Consultancy Services, which announced quarterly earnings after market hours, closed flat at Rs 1,888.15 on the BSE.

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First Published on Jan 10, 2019 05:07 pm
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