India’s largest IT services company Tata Consultancy Services (TCS) reported its highest third quarter order book in at least the past five fiscal years with total contract value (TCV) at $10.2 billion in the period ended December 31.
This comes in a seasonally weak quarter for the IT industry due to holiday season in core markets like North America.
The TCV for the quarter was 25.93 percent higher from the $8.1 billion in the year-ago period and was up 18.6 percent from the previous quarter, the company said on January 9.
From Q3, TCS’ deal wins include a 15-year end-to-end digital solution deal with Ireland’s Department of Social Protection, a multi-year AI-ready, cloud native data landscape deal with Air France-KLM, a transformation deal with Bank of Bhutan, a five-year deal extension with Denmark’s Telenor, and a three-year hardware and software deal for the Indian government’s SPARSH (System for Pension Administration- Raksha) to name a few.
K Krithivasan, Chief Executive Officer and Managing Director, said: “We are pleased with the excellent TCV performance in Q3 which was well-rounded across industries, geographies and service lines lending good visibility to long-term growth.”
“BFSI and CBG returning to growth, continued stellar run of Regional Markets and early signs of revival in discretionary spend in some verticals give us confidence for the future. Our continuing investments in upskilling, AI/Gen AI Innovations and partnerships sets us up to capture the promising opportunities ahead,” he added.
Geographically, demand was led by India market, which grew 70.2 percent YoY in constant currency (CC) terms, followed by MEA at 15 percent, Asia Pacific at 5.8 percent and Latin America at 7 percent.
India growth was majorly driven by the ongoing execution of the Rs 15,000-crore BSNL deal. But this is likely to slowdown in the upcoming quarters as the project has crossed its peak revenue generating phase, according to analysts at JM Financial.
Core markets, including North America, declined 2.3 percent in CC YoY. The UK grew 4.1 percent but Continental Europe declined 1.5 percent.
Among verticals, BFSI, which accounts for 30-40 percent of the revenue, grew 0.9 percent YoY in CC terms. Consumer business was up 1.1 percent, technology services declined 0.4 percent and communication and media slumped 10.6 percent.
TCS reported its Q3 earnings on January 9. The consolidated net profit came in at Rs 12,380 crore, a rise of 12% when compared to Rs 11,058 crore in the year-ago period, thus beating estimates marginally.
The company's consolidated revenue from operations rose 6% to Rs 63,973 crore in Q3FY25 from Rs 60,583 crore in Q3FY24, thus missing estimates. On a sequential basis, the IT major's net profit rose 4%.
A Moneycontrol poll of seven brokerages pegged TCS’ October-December net profit at Rs 12,308 crore, and revenue at Rs 64,218 crore.
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