TCS beats mkt estimates with 64.4% profit growth
MUMBAI: Tata Consultancy Services (TCS) Ltd reported a 64.4% year-on-year increase in net profit to `6,341 crore during the January-March quarter, beating estimates, on improving margins and strong revenue growth.
Analysts were expecting the company to post a net profit of `6,280 crore during the quarter, according to Reuters.
The Mumbai-based software services major, which is also the largest contributor to the overall revenues of the $109-billion Tata Group, reported a 17.5% year-on-year rise in revenue to `28,449 crore.
TCS’ results come three days after the company was ordered to pay $940 million to Epic Systems in a trade secret lawsuit in the US.
“Our core portfolio performed strongly in a seasonally weak fourth quarter driven by strong volumes and led by growth in BFSI (banking and financial services), retail and manufacturing sectors. This gives us good momentum going into the new financial year,” MD N Chandrasekaran said. “Our investments in building high-impact digital platforms are paying off, resulting in over $2.3 billion in digital revenues.”
“We don’t give guidance, but we can say it will be a strong year,” he added.
The company, which is one of the largest employers, said the attrition rate for IT services was 14.7% during the fourth quarter, while overall it was 15.5%.
In the fourth quarter, TCS had seven large deal wins across six verticals. It hired 22,576 employees on a gross basis in JanuaryMarch, while for 2015-16, gross hiring was at an all-time high of 90,182, taking its total employee strength to 353,843.
“TCS result is a clear reassurance that investment made by companies earlier to reinvent themselves in the light of global acceptance of digital business, the impact of cloud and other contemporary technologies are now starting to pay dividends,” said Sanjoy Sen, doctoral research scholar at Aston Business School.