TCS Q4 profit rises 7.4% to ₹9,926 crore

Company proposes final dividend of ₹22 per share

April 11, 2022 09:28 pm | Updated 09:52 pm IST - Mumbai:

Rajesh Gopinathan, chief executive and managing director of India’s largest software exporter Tata Consultancy Services (TCS), speaks during a press conference announcing the Q4 and annual results of the company in Mumbai on April 11, 2022.

Rajesh Gopinathan, chief executive and managing director of India’s largest software exporter Tata Consultancy Services (TCS), speaks during a press conference announcing the Q4 and annual results of the company in Mumbai on April 11, 2022. | Photo Credit: AFP

Tata Consultancy Services (TCS) reported fourth quarter net profit grew 7.4% year-on-year to ₹9,926 crore r on account of improved performance in all verticals across geographies.

Revenue for the quarter ended March 31 increased 15.8% to ₹ 50,591 crore. In constant currency, the growth was 14.3%. Operating margin at 25% was down 189 basis points compared with the year-earlier period.

For the full year ended March 31, the company reported 14.8% growth in net profit to ₹38,327 crore. Revenue grew by 16.8% to ₹1,91,754 crore. The constant currency growth was 15.4%.

“We are closing FY22 on a strong note, with mid-teen growth and adding the maximum incremental revenue ever,” said Rajesh Gopinathan, CEO and MD. “Overall it’s a very strong year (FY22). We are happy at the way we have executed the rebound. Our investments in services are paying up.

“Increasing participation in our customers’ growth and transformation journeys, and an all-time high order book provide a strong and sustainable foundation for continued growth ahead,” he added.

“It is immensely satisfying to close the year with robust, broad-based growth, industry-leading margins and the highest ever order book,” said N. Ganapathy Subramaniam, COO and ED.

“During the year, we took on technologically-challenging, industry-first transformational programmes and brought to bear the full power of TCS’ capabilities and that of our partner ecosystem, to successfully deliver market-changing outcomes,” he said.

“Our continued investments in building newer capabilities, our passion for innovation, our contextual knowledge and most importantly, our self-belief have been key to this, and these position us very well for continued success ahead,” he added.

“While continuing to make all the investments needed to support our growth aspirations, we managed the headwinds this year to deliver an industry-leading operating margin yet again,” said Samir Seksaria, CFO.

“The successful completion of our fourth buyback in five years is another milestone in our shareholder-friendly approach to capital allocation,” he added. The company said during the fourth quarter it had achieved the highest ever order book of $11.3 billion and the total order book in FY22 was $34.6 billion. 

All verticals of the company grew during the quarter and the year in mid to high teens and growth was led by retail and CPG.  Growth among markets was led by North America followed by U.K. and continental Europe. The company said demand continued to be strong during the quarter as well as the full year across all markets, industries and services with growth led by Cloud, Cyber Security, Enterprise Application Services & IoT and Digital Engineering. 

In FY22, there was a net addition of 1,03,546 employees and the employee head count was 5,92,195. The attrition in IT services in the year was 17.4%.  At the end of the financial year the company had free cash flow of ₹39,181 crore and it returned cash of ₹31,424 crore to shareholders through share buyback and dividends, the company said. 

For the fourth quarter, the company has proposed a final dividend of ₹22 per share. The average wage hike in FY22 was 6 to 8% and in FY23 there would be a similar hike, Mr. Gopinathan said. 

The company said it would hiire 40,000 employees in the current year to begin with. It is unlikely to face any adverse impact due to the Russian war, it added. 

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