Net profit of Tata Consultancy Services (TCS) rose 2% year-on-year to ₹11,058 crore for the quarter ended December 31, 2023, compared with ₹10,846 crore in the year-ago period.
Consolidated revenue increased 4% year-on-year to ₹60,583 crore in the third quarter as against ₹58,229 crore in the corresponding quarter last fiscal.
The operating margin of India's largest software services provider improved 50 basis points to 25% while its net margin stood at 19.4%.
TCS board approved a dividend of ₹27 per share. This includes a third interim dividend of ₹9 and a special dividend of ₹18.
The Bengaluru-based IT company reported a net attrition of 13.3%.
Growth in the third quarter was led by the Energy, Resources and Utilities vertical which grew 11.8%, Manufacturing which grew 7% and Life Sciences and Healthcare which grew 3.1%. The Consumer Business Group (CBG) grew -0.3%, BFSI grew -3%, Communications & Media grew -4.9% and Technology & Services grew -5.0%.
AI.Cloud, cybersecurity and cognitive business operations led the growth amongst service lines. AI.Cloud led the demand with strong momentum sustaining for Cloud migrations and increasing interest among customers for AI and Generative AI, says the company.
“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,” says K Krithivasan, CEO and managing director, TCS.
“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,” Krithivasan says.
During the quarter, TCS saw significant demand for migration, modernisation, and business transformation opportunities on cloud platforms.
“Our disciplined execution and operational rigor drove strong improvement in our industry leading margins despite seasonal headwinds. We are making the right investments in our people, innovation and infrastructure to differentiate ourselves and create long term value for all our stakeholders,” says Samir Seksaria, chief financial officer, TCS.
TCS has committed to hiring from college campuses and growing talent organically. “We have commenced our campus hiring process for the next year and see tremendous excitement among freshers to join TCS,” says Milind Lakkad, chief HR Officer, TCS.
“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,” says N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, TCS.