India’s largest information technology exporter, Tata Consultancy Services (TCS), reported a marginal 0.2% increase in its third quarter net profit to ₹8,118 crore due to other income being lower.
Sales to the banking financial services and insurance, as well as retail segments were challenging during the seasonally weak quarter, affecting metrics.
Rise in profit was reported on a 6.7% growth in revenue to ₹39,854 crore, aided by currency gains, compared to a year earlier. The operating margin stood at 25%, with the net margin at 20.4% during the quarter.
“We saw the sectoral trends of the first half of the year continue to play out in the third quarter,” said TCS MD and CEO Rajesh Gopinathan. “Our robust order book during the quarter reflects our ability to pitch innovative technology solutions to address the business needs of different stakeholders in [client] enterprises.”
When asked about the impact of the NCLAT judgement on the reinstatement of Cyrus Mistry as Tata Sons chairman, he said, “There will be no impact as the matter was referred to Supreme Court and it ordered a blanket stay.”
TCS announced an interim dividend of ₹5 per share. N. Ganapathy Subramaniam, COO and executive director, said, “In a seasonally weak quarter characterised by furloughs across multiple industry verticals, we focused on execution, while continuing to invest for future growth. Having on-boarded over 30,000 trainees in the first half of the year, we worked on driving up utilisation in Q3 and had good outcomes. Our client metrics were also very good, with additions across most revenue buckets.”
Sectorwise, Life Sciences & Healthcare climbed 17.1%, manufacturing rose 9.2% and communications and media increased 9.5%.
Among geographies, Europe rose 15.9%, North America and Asia Pacific climbed 4.1% and 5.7%, respectively, while India grew 6.4%. TCS shares fell 0.91% to ₹2,218 on the BSE on Friday, valuing the firm at ₹8.32 lakh crore, making it India’s second-most valued company after Reliance Industries.
