India's largest IT services company, Tata Consultancy Services (TCS) on January 11 reported net profit of Rs 11,058 crore in the quarter ended December 31, 2023, up 2 percent from Rs 10,846 crore in the same quarter a year ago. The marginal rise was despite high furloughs BFSI and hi-tech sectors, coupled with continued slowdown in discretionary spending.
Net profit was down 2.5 percent on a sequential quarter basis, majorly missing Moneycontrol’s estimates.
Consolidated revenue rose 4 percent YoY to Rs 60,583 crore in the three months to December 31 from Rs 58,229 crore a year earlier, TCS said in an exchange filing.
The EBIT margin or the operating margin was up to 25 percent, an expansion from 24.3 percent in the previous quarter; beats Moneycontrol’s estimates.
TCS board also approved dividend of Rs 27 per share, including special dividend of Rs 18 for the financial year 2023-2024.
Commenting on the performance, K Krithivasan, Chief Executive Officer and Managing Director, said: “Our strong performance in a seasonally weak quarter buffeted by macro-economic headwinds, demonstrates the strength of our business model with a well-diversified portfolio and a customer centric strategy.”
“We are seeing strong deal momentum across markets resulting in a solid order book providing visibility into our long-term growth. We are seeing tremendous interest in Generative AI and are leading the innovation and exploratory efforts for our customers in this area,” he added.
TCS reported deal total contract value (TCV) of $8.1 billion, down from $11.2 billion in the previous quarter. This is also below TCS’ quarterly guidance range of $9-10 billion.
N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, said, “The quarter saw us make significant progress in many projects of national importance, demonstrating our execution strength. Our products and platforms had a strong quarter with new wins and go-lives.”
“The MCX platform is scaling well and processing record transaction volumes. We are on course with the BSNL 4G/5G network roll out. We are making good progress in upskilling our employees in Generative AI through our AI playground platform,” he added.
TCS saw its headcount decline for a second consecutive quarter. Headcount was down by 5,680 in Q3.
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