TCS revenue jumps 19.1% to ₹58,229 crore; profit at ₹10,883 cr

Tata Consultancy Services on Monday reported a net profit of ₹10,883 crore for the third quarter of financial year 2022-23, up 10.98% year-on-year from ₹9,806 crore in the corresponding period last fiscal.

Revenue from operations jumped 19.1% year-on-year to ₹58,229 crore during the quarter ended December 31, 2022, aided by cloud demand and market share gains, the IT services firm says in its stock exchange filing. This compares with ₹48,885-crore revenue in the year-ago period.

Among major markets, North America and the U.K. led with 15.4% growth; Europe grew 9.7%. In emerging markets, Latin America grew 14.6%, India grew 9.1%, Asia Pacific grew 9.5% and Middle East & Africa grew 8.6%. In constant currency terms, TCS' revenue rose 13.5% year-on-year in the December quarter.

Operating margin of the software company contracted 0.5% year-on-year to 24.5%. Net margin of TCS stood at 18.6%. The company's order book stood at $7.8 billion at the end of the third quarter. Its workforce stood at 6,13,974 employees. Of this, women constituted 35.7%. The company's attrition rate declined to 21.3% during the said quarter.

The Tata group company's board announced a dividend of ₹75 per share, including special dividend of ₹67 per share.

"We are pleased with our strong growth in a seasonally weak quarter, driven by cloud services, market share gains through vendor consolidation, and continued momentum in North America and UK. The sustained strength of demand for our services is a validation of the value we provide to our clients in helping them differentiate themselves, while enhancing their competitiveness. Looking ahead, and beyond current uncertainties, our longer-term growth outlook remains robust," says Rajesh Gopinathan, chief executive officer and managing director, TCS.

Growth was led by retail and consumer packaged goods (18.7%) and life sciences and healthcare verticals (14.4%). Communications and media grew 13.5% and technology and services grew 13.6%. Manufacturing grew 12.5%, while banking, financial services and insurance grew 11.1%.

"Improved productivity, currency support and abating supplyside challenges helped expand our operating margin in Q3. This gives us greater confidence in our ability to steer our profitability towards our preferred range, while continuing to invest in building newer capabilities to support our growth and market share gains," says Samir Seksaria, chief financial officer, TCS.

TCS said its cloud units continued to see very strong growth, led by services for cloud migration and modernisation, hybrid cloud adoption, managed services and governance. "Growth in Q3 was led by offerings around Salesforce, SAP, and niche SaaS platform services in the areas of human capital management, supply chain & CRM, managed security services and enterprise vulnerability management. There was increased SaaS adoption to improve the experience across sales & service channels, improve employee engagement, and derive better business insights," the ITcompany says.