TCS Q4 Results: Revenue Rises On Record Deal Wins, Profitability Intact

Record dealmaking has propelled Tata Consultancy Services Ltd. in what was a year of slowdown for the wider Indian information technology services industry. The numbers held up in the January-March quarter as well.

Revenue of India's largest IT services firm rose 1.1% over the previous three months to Rs 61,237 crore in the quarter ended March 31, 2024, according to an exchange filing on Friday. That compares with the Rs 61,451.3-crore consensus estimate of analysts tracked by Bloomberg.

• Revenue up 1.1% at Rs 61,237 crore (estimate: Rs 61,451.3 crore).

• Net profit rose 12.7% Rs 12,502 crore (estimate: Rs 12,034 crore).

• Ebit increased 5% to Rs 15,918 crore (estimate: Rs 15,548 crore).

• Margin expanded 97 basis points to 25.99% (estimate: 25.3%).

• Board approved final dividend of Rs 28 for FY24.

Note: One basis point is one-hundredth of a percentage point.

For the fiscal ended March 31, 2024, revenue rose 3.5% year-on-year to Rs 61,237 crore. It was up 2.2% in constant currency terms.

In dollar terms, revenue rose 2.3% year-on-year to $7,195 million. It was up 2.2% in constant currency terms.

• TCS clocked record total contract value of $13.2 billion in Q4 FY24.

• TCV in dollar terms rose to an all-time high of $42.7 billion in FY24.

• Operating margin at 24.6% for FY24, net margin at 19.3%.

• Net profit rose 10.5% year-on-year to Rs 46,585 crore in FY24.

"We are pleased to close Q4 and FY24 with the highest-ever order book and 26% operating margin," K Krithivasan, chief executive officer at TCS, said in a statement on Friday.

"In an environment of global macro uncertainty, we are staying close to our customers and helping them execute on their core priorities."

Interestingly, it wasn't the bread-and-butter financial services vertical that led growth for the Indian IT's bellwether. In fact, the BFSI segment shrank 3.2% in FY24. The energy, resources and utilities (12.6%), manufacturing (7.3%) and life sciences and healthcare (4.8%) powered revenue.

Still, BFSI made up 32.9% of TCS' revenue as on March 31. The consumer business (16%) and life sciences (10.9%) were the next largest contributors. The company had 62 clients in the $100-million-plus band and 139 in the $50-million-plus band.

Geographically, while the United Kingdom was the fastest growing for TCS at 10.1%, the United States continued to bring in more than half of TCS' annual revenue. The business in that region actually shrunk in FY24.

"In FY24, our disciplined approach to operations have helped us expand our industry-leading margins," Samir Seksaria, chief financial officer at TCS, said in the statement. "We will continue to drive efficiencies and competitiveness for growth and profitability."

The headcount, however, dipped by about 13,794 employees to 6,01,546 in the fiscal ended March 31. The attrition rate stood at 12.5% on a trailing 12-month basis. Those on the rolls have received an average increment of 4%-7.5%, while outperformers enjoyed double-digit salary hikes.

"We are pleased to announce the annual increments for our workforce, as we have done consistently every year, with top performers receiving double-digit hikes," said Milind Lakkad, chief HR officer at TCS.

"The reduced attrition at 12.5%, the enthusiastic response to our campus hiring, increased customer visits and employees returning to the office have resulted in great vibrancy in our delivery centres and elevated morale of our associates."

On Friday, TCS shares rose 0.45% to Rs 4,000.30 apiece on the BSE, even as the benchmark Sensex ended the day 1.06% lower at 74,244.90 points. The quarterly results were declared after market hours.