TCS posts 5% QoQ rise in net profit at Rs 11,392 crore; announces dividend of Rs 24

Tata Consultancy Services (TCS) kickstarted the earnings season of the March quarter of the fiscal year 2022-23 (Q4FY23) on April 12. The IT bellwether posted a 5 per cent quarter-on-quarter (QoQ) rise in its consolidated net profit at Rs 11,392 crore for the January-March period. On a yearly basis, the profit grew 14.76 per cent. The company's revenue came in at Rs 59,162 crore, up 1.6 per cent QoQ and 16.9 per cent YoY. Revenue in constant currency terms came in at 0.6 per cent.

The numbers were slightly below Zee Business Research's estimates as the research house had expected the company to report a 1.7 per cent rise in its revenue on a sequential basis to Rs  59,200 crore while PAT or profit after tax was estimated to grow 6.9 per cent to Rs 11,600 crore.

The company also announced a dividend of Rs 24 per share. Its operating margin stood at 24.1 per cent while its net margin was at 18.7 per cent during the January-March period.

TCS' total contract value (TCV) for the said quarter came in at $10 billion with an all-time high number of large deals. For the full year FY23, the total order book stood at $34.1 billion.

Commenting on the company's performance, Rajesh Gopinathan, the outgoing Chief Executive Officer and Managing Director said: “It is very satisfying to look back at our strong growth in FY 2023, on top of the mid-teen growth in the prior year. The strength of our order book demonstrates the resilience of demand for our services and gives us visibility for growth in the medium term. Krithi and I are working closely to ensure that the leadership transition over the next few months is smooth and seamless to all our stakeholders and that TCS is well positioned to capture the opportunities ahead.”

The company further announced that K Krithivasan will take over as CEO and MD from June 1, 2023.

TCS Q4 earnings: Catch all the live updates here

Other key details of Q4 and FY23

The company, in its earnings release, said that its Q4 growth was led by the UK which grew 17 per cent, followed by North America (up 9.6 per cent) and Continental Europe (8.4 per cent). Among emerging markets, Latin America grew 15.1 per cent, India grew 13.4 per cent, the Middle East & Africa grew 11.3 per cent and Asia Pacific grew 7.5 per cent. On a full-year basis, among major markets, North America grew 15.3 per cent, the UK grew 15 per cent and Continental Europe grew 11 per cent. In emerging markets, Latin America grew 17.3 per cent, India grew 14.6 per cent, Middle East & Africa grew 7.8 per cent while Asia Pacific grew 7.6 per cent, the company stated in its earnings release.

Segmentwise, the company's growth during the quarter was led by Retail and CPG (+13 per cent) and Life Sciences and Healthcare (+12.3 per cent). Other verticals grew in the single digits. Technology & Services grew 9.2 per cent, BFSI grew 9.1 per cent, Manufacturing grew 9.1 per cent and Communications & Media grew 5.3 per cent, the company informed in its earnings release. 

Headcount, attrition & other details

During the quarter, it added 821 employees while in FY23, the company added a total of 22,600 staff. The total employee headcount for the full year stood at 614,795. Of this, 35.7 per cent are women and the entire workforce comprises a staff of 150 nationalities, TCS said in its release. Further, its IT Services Attrition in the last twelve months was 20.1 per cent. Free Cash Flow stood at Rs 41,440 crore while the total dividend payout to shareholders was Rs 45,602 crore.

As on March 31, 2023, the company said it has applied for 7,305 patents, including 171 applied during the quarter, and been granted 2,878 patents including 184 during the quarter.

Samir Seksaria, Chief Financial Officer, said: “FY 23 was a year of transition, as supply-side challenges abated while pandemic-depressed travel and discretionary spends normalised. We navigated this change well, without slowing down our investments in our people, research and innovation and intellectual property. Our longer-term competitiveness remains intact, giving us industry-leading profitability even as we pursue our growth aspirations.” 

Catch TCS Q4 results highlights here