Mumbai, Jan 10 (IANS) Indian IT bellwether Tata Consultancy Services (TCS) on Thursday posted robust net profit and revenue growth for the third quarter of this fiscal (2018-19), beating estimates by analysts and a weaker rupee.
The city-based Tata Group’s flagship company reported Rs 8,121 crore consolidated net profit for the quarter (Q3) under review, registering 24 per cent annual growth from Rs 6,545 crore in the same period a year ago.
Similarly, consolidated revenue for the quarter grew 21 per cent year-on-year (YoY) to Rs 37,338 crore from Rs 30,904 crore in the like period a year ago.
Sequentially, net profit, however, rose 2.5 per cent from Rs 7,927 crore but revenue remained flat (0.1 per cent) from Rs 36,854 crore a quarter ago.
Under the International Financial Reporting Standard (IFRS), net income grew 12 per cent YoY to $1,140 million from $1,014 million in the same period a year ago and gross revenue rose 9.7 per cent YoY to $5,250 million from $4,787 million in the like period a year ago.
Sequentially, net income grew 1.9 per cent from $1,119 million and gross income remained flat (0.7 per cent) from $5,215 million a quarter ago.
Profit before tax grew 24 per cent YoY to Rs 10,727 crore from Rs 8,651 crore in the same period year ago and 2.2 per cent sequentially from Rs 10,501 crore a quarter ago.
Operating margin for the quarter at 25.6 per cent remained flat (0.4 per cent) YoY.
Accounting for 30 per cent of the revenue, digital business grew a whopping 53 per cent YoY during the quarter.
Geographically, it grew in Britain 25 per cent YoY and in Europe 17.6 per cent YoY.
“The board has recommended Rs 4 or a whopping 400 per cent dividend per share of Re 1 face value,” said the company in a statement here later.
The company acquired the London-based digital design studio W12 Studios Ltd for Rs 66 crore during the third quarter.
“We are wrapping up 2018 with a strong revenue growth in the December quarter, which is the highest in 14 quarters, with growth acceleration in key verticals and across geographies,” said Chief Executive Rajesh Gopinathan in the statement.
Strong client metrics, industry-leading growth in digital services, a strong order book and deal pipeline validate that customers recognise the outsourcing firm’s differentiated capabilities.
“On a secular basis, as large segments of the economy go through churn driven by digital disruption, enterprises are responding with technology-powered strategies – as in algorithmic retailing or connected cars – creating a huge opportunity for services providers like us,” said Gopinathan.
The company’s investments in research and innovation, its deep domain and contextual knowledge, intellectual property and collaborative approach to co-innovation have been key to its participation in the opportunity.
“This has been a satisfactory quarter in terms of revenue growth and operating metrics. The investments we have been making in building newer capabilities and frameworks are bearing fruit,” said Chief Operating Officer N. Ganpathy Subramaniam in the statement.
Chief Financial Officer V. Ramakrishnan said despite headwinds from the rupee volatility against other currencies and higher cost of doing business in some markets, the operating margins were resilient.
“We remain focused on driving rigour in our operations, generating strong cash flows and steering profitability back to preferred range, while continuing to invest for growth,” added Ramakrishnan in the statement.
The company added 6,827 techies in Q3, taking the total number of employees to 417,929 on a consolidated basis, with nearly 36 per cent being women.
The attrition rate was 11.2 per cent in the quarter.
“We have navigated technology change in the digital era by investing in equipping employees with skills on newer technologies while valuing them for their contextual knowledge,” said Human Resources Head Ajoy Mukherjee.
The company’s blue-chip scrip of Re 1 face value, however, ended trading flat (35 paisa) on the BSE at Rs 1,888.15 from Wednesday’s closing price of Rs 1,887.80 and opening rate of Rs 1,904 after touching a high of Rs 1906.80 and a low of Rs 1,874.10 during the intra-trading sessions.