TCS Q4: IT bellwether posts lacklustre numbers; 8 key takeaways

The numbers: The company said its consolidated revenue for the quarter increased to Rs 39,946 crore, from Rs 39,854 crore in the October-December period 2019 and from Rs 38,010 crore in the March quarter of FY19.

The numbers were slightly below analyst estimates. Profit was estimated at Rs 8,200 on revenue of Rs 40,440 crore for the quarter.

Dollar revenue for the quarter at $5,444 million, while constant currency revenue growth at 3 percent during the quarter, much lower compared to 6.8 percent in December quarter and 12.7 percent in Q4FY19.

Life sciences lead revenue growth: TCS said its revenue growth was led by life sciences and healthcare (16.2 percent), communications and media (9.3 percent) and manufacturing (7 percent).

The company's retail and CPG segment grew by 4.2 percent while technology and services segment grew by 3.5 percent. Revenue of BFSJ segment, however, declined 1.3 percent.

Market growth was led by Europe: TCS said its market growth was led by Europe (11.9 percent). The UK market grew by 5.4 percent while Latin America grew by 3.9 percent, Asia Pacific by 3.5 percent and MEA by 1.3 percent. North America's was flat at 0.2 percent while 1ndia's market growth declined by 1.9 percent.

Strategic wins: "Enterprise Agility, as a key enabler of enterprise-wide operating model transformation goals, enabled several strategic wins," TCS said.

'MFDM' and 'Bringing Life to Things' frameworks continued to gain mindshare and powered multiple transformational engagements. Engineering, Cloud, Cyber Security and Enterprise Intelligent Automation services-led growth during the quarter, TCS claimed.

Walgreens Boots Alliance, a global leader in retail and wholesale pharmacy, expanded its strategic partnership with TCS with a multi-year contract, the company said.

Large German Retailer selected TCS as a Strategic Application Development Management (ADM) Partner for analytics and mobility platforms and extended its strategic infrastructure services partnership contract, said the company.

The total contract value of Q4 was $8.9 billion, TCS said.

Research and innovation: As per the BSE filing, as on March 31, 2020, TCS had applied for 5,216 patents, including 210 applied during the quarter, and has been granted 1,341 patents.

Headcounts: The company said it added 1,789 employees during March quarter of FY20. It said it had hired 24,179 employees on a net basis in FY20, taking up the total headcount to 4,48,464 as of March 31, 2020.

"The company continues to be the employer of choice, with industry-leading talent retention. IT Services attrition rate (LTM) was at 12.1 percent," said TCS.

Dividend: The board of directors have proposed the final dividend of Rs 6 per share. The company said it had returned over Rs 37,702 crore of cash to shareholders in dividends during FY20.

Management commentary: The management of the company highlighted that the COVID-19 had caused disruption to its operations and the pandemic had presented an operational challenge of scale, speed and complexity.

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: "COVID-19 presented us an operational challenge of scale, speed and complexity. Despite the lockdawns, I am pleased that our customers continue ta experience the same energy and delivery certainty from TCS as before. All in all, we managed to not only maintain off essential services for our customers, but also continue the journey in their growth and transformation programs. As for the operating metrics, I om particularly happy with the robust client metrics this quarter, with strong additions across mast revenue buckets."

Rajesh Gopinathan, Chief Executive Officer and Managing Director of the company said: "The pandemic completely reversed the positive momentum that we had started seeing in some of our biggest verticals in the first half of the quarter. On the positive side, we had very strong deal closures during the quarter. fn fact, our order book this quarter is the largest ever, from the time we started reporting the metric."