TCS Q4 net profit beats estimates, rises 9%
BENGALURU: The country’s largest IT services company Tata Consultancy Services (TCS) on Friday reported a 9% increase in its consolidated net profit for the fourth quarter ended March 31, 2024, at Rs 12,434 crore on the back of record deal wins.
Its revenue from operations for Q4 stood at Rs 61,237 crore, a growth of 3.5%, compared to Rs 59,162 crore in the year-ago period. TCS’ FY24 deal wins stood at an all-time high at $42.7 billion and in Q4, its total contract value (TCV) stood at $13.2 billion.
For full fiscal FY24, the company’s consolidated net profit stood at Rs 45,908 crore, a 9% growth, compared to Rs 42,147 crore in FY23, and its full year revenue stood at Rs 2,40,893 crore, up 6.8% year-on-year (YoY).
Addressing a press conference, K Krithivasan, chief executive officer and managing director of TCS, said, “We have won more than 200 engagements in AI so far this year and our AI and Gen AI pipeline have doubled in this quarter to $900 million.” The company’s growth in the fourth quarter was led by India at 37.9% and UK at 6.2%.
Its operating margin for the quarter stood at 26%, YoY expansion of 150 bps and net margin at 20.3%. N Ganapathy Subramaniam, COO and Executive Director, who will be retiring next month after working with the company for over 40 years, said barring one mega deal, deal sizes are mixed and broad-based. “Many of them are short-term deals of much lower value which is actually good for us,” he said. TCS CEO said no single individual can replace Subramaniam and that they don’t intend to appoint a new COO.
The company is delegating responsibilities across its senior leadership team. Considering the present market uncertainty, Krithivasan also said that it would be difficult to call when growth will return. But he added that FY25 is expected to be a better year than FY24. For the first time in 19 years, TCS’ employee headcount has declined by 13,249 employees in FY24 compared to the previous fiscal. Its IT Services Attrition rate stood at 12.5%
The company also announced a final dividend of Rs 28 per share. Also, the management said there are numerous significant opportunities await in India. While the BFSI sector and the consumer business saw a slight decline, the manufacturing segment surged by 9.7%. N Ganapathy Subramaniam also added that our products and platforms business sparkled with the mega deal win at Aviva and emerging markets had another stellar growth quarter demonstrating the power of TCS’ diversified portfolio.
Employees to receive 4.5%-7% average salary hike
TCS on Friday announced the annual increments to its employees. Top performers will receive double digit hikes. Milind Lakkad, chief HR officer, said everyone will receive wage hikes starting April and the range would be between 4.5% to 7%.
He added, “The reduced attrition at 12.5%, 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.”
TCS is one among the first companies to visit campus and like every year, it will recruit 40,000 freshers in FY25. The IT company has announced its annual TCS national qualifier test (NQT) and Lakkad said all freshers will be onboarded.