Industry

TCS Q3 net profit at Rs 8,701 crore, up 7.2%

Wind in the sails: Strong revenue conversion from earlier deals helped drive momentum, said the CEO.   | Photo Credit: Jignesh Mistry

Tata Consultancy Services Ltd. (TCS) on Friday reported third-quarter consolidated net profit rose 7.2% from a year earlier to ₹8,701 crore.

The information technology services provider said the increase was backed by broad-based growth across segments especially in cloud-based services.

Revenue grew 5.4% to ₹42,015 crore. The operating margin in the quarter stood at 26.6%.

The board announced an interim dividend of ₹6 per share.

“Growing demand for core transformation services and strong revenue conversion from earlier deals have driven a powerful momentum that helped us overcome seasonal headwinds and post one of our best performances in a December quarter,” said Rajesh Gopinathan, CEO & MD.

“We are entering the new year on an optimistic note, our market position stronger than ever before, and our confidence reinforced by the continued strength in our order book and deal pipeline.

‘Q4 to enjoy tailwind’

“We will enjoy the tail wind for the next quarter. The momentum is very strong and sustainable. We are expecting to return to double-digit growth in FY22,” he added.

Mr. Gopinathan said cloud was enabling a new class of boundary-less organisations that can ‘seamlessly partner and collaborate within larger ecosystems to create innovative purpose-driven offerings to customers’.

“It is a beat [in performance] across the board,” said Urmil Shah, Research Analyst and VP, IDBI Capital. “I am particularly impressed with margins. The icing on the cake is that TCS is confident of attaining double-digit growth in FY22.”

‘Highest in 5 years’

“Strong growth across all our verticals, and operational benefits from our SBWS model allowed us to post the highest operating margin in the last five years, even after rolling out a salary increase this quarter,” said V. Ramakrishnan, Chief Financial Officer. “We also had an all-time high cash conversion in [the last quarter],” he added.

All verticals showed positive sequential growth, led by manufacturing (+7.1%), BFSI (+2%), life sciences and healthcare (+5.2%), communications & media (+5.5%) and retail and CPG (+3.1%).

“On a year-on-year, constant currency basis, Life Sciences and Healthcare continued to grow at 18.2%. BFSI (+2.4%) and Technology & Services (+2.4%) also moved into positive territory,” the company said in a regulatory filing.

Sequential growth for regions was led by North America (+3.3%), India (+18.1%), the U.K. (+4.5%), and Continental Europe (+2.5%), TCS added.

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Printable version | Mar 8, 2021 12:44:44 AM | https://www.thehindu.com/business/Industry/tcs-q3-net-profit-at-rs-8701-crore-up-72/article33532213.ece

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