BENGALURU: The country’s largest IT services company Tata Consultancy Services (TCS) on Thursday reported a 2% year-on-year (YoY) growth in its consolidated net profit for the December quarter to Rs 11,058 crore compared to Rs 10,846 crore profit it posted in the year-ago period.
It reported higher-than-expected revenue for the third quarter and met Street estimates at Rs 60,583 crore, up 4% YoY. The company’s operating margin for the quarter stood at 25% and its order book for the quarter was $8.1 billion. K Krithivasan, CEO and MD, said, “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.”
The IT major also said that the overall situation has not deteriorated from the last quarter. Krithivasan also pointed out that they are seeing tremendous interest in Generative AI and that four production deployments have happened in the third quarter.
In the December quarter, the IT company saw strong double-digit growth in emerging markets, led by India at 23.4%. Among major markets, the United Kingdom led with 8.1% growth. However, North America degrew by 3% YoY and the BFSI vertical had a decline of 3% YoY in the third quarter.
N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, said, “The quarter saw us make significant progress in many projects of national importance.”For many quarters now, IT companies are seeing a sharp decline in attrition rate and TCS’ attrition is trending down at 13.3%. However, its employee headcount in this quarter too reduced by 5,680 employees.
Last quarter, its headcount declined by 6,333. On headcount reduction, Milind Lakkad, Chief HR Officer, said that they hired a good number of trainees from the market in recent years and that they are leveraging those additions.
He also hinted that future quarters might see similar declines. As far as campus hiring is concerned, the chief HR officer said that they are 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,” he added. The board has recommended a special dividend of Rs 18 per share and an interim dividend of Rs 9 per share.
During the quarter, it saw significant demand for migration, modernisation, and business transformation opportunities on cloud platforms. It saw increased demand for data on cloud with enterprises seeking to harness the capabilities offered by both cloud and Gen AI. The quarter saw strong growth in its services across industry verticals.
Earnings call