TCS posts better-than-expected result; Q3 net up 11%

TCS said employee addition during the quarter stood at 18,362

India's biggest software services firm TCS today reported 10.9 per cent jump in profit to Rs 6,778 crore for the third quarter of the current fiscal.

It had reported net profit of Rs 6,110 crore in the October-December period of last fiscal. The operating profit was at Rs 7,733 crore in the reported quarter.

Revenue of Tata Consultancy Services was up 8.7 per cent at Rs 29,735 crore in the third quarter of 2016-17, from Rs 27,364 crore in the year-ago period.

On quarter-on-quarter basis, net profit was up 2.9 per cent, while revenue grew 1.5 per cent in the said quarter.

"The resilience of our business model and strength of our operating strategy has been brought to the fore by our performance in Q3, traditionally a quarter of weak demand," TCS MD and chief executive N Chandrasekaran said.

"Our strengths in Digital, Platforms and Cloud as well as our deep knowledge of the customers' domain are driving our ability to play a strategic role and make a holistic impact on the business," he said.

To support and sustain the company's digital business that is growing at 30 per cent on an annual basis, TCS continues to build new capabilities in digital technologies, empower employees to enhance agility in the workplace and invest more to develop IP-based platforms and products, he added.

"Alongside a good growth performance, we have been able to keep profitability stable in our desired range and deliver over $1 billion in free cash flow during the quarter," TCS chief financial officer Rajesh Gopinathan said.

The company declared a dividend of Rs 6.5 per share and its earnings per share (EPS) stood at Rs 34.40.

TCS said employee addition during the quarter stood at 18,362 (gross) and 6,978 (net), taking the overall count to 378,497 people.

The total attrition rate fell to 11.3 per cent in IT services; it was at 12.2 per cent including BPS. The percentage of women employees at the company rose to all-time high of 34.6 per cent.

"Our efforts and investments to build professionals with the right digital skills continues and now more than 1.9 lakh TCSers are equipped with new capabilities to help our customers with their transformations. We are also happy that our retention rates continue to rise as we remain engaged with our employees to help them succeed in a digital world," TCS executive vice president and global head (HR) Ajoy Mukherjee said.

During the third quarter, growth was led by energy and utilities (up 5.8 per cent sequentially), Hi-Tech (2.6 per cent), banking, financial services and insurance (2.1 per cent), manufacturing (2.1 per cent) and retail (1.9 per cent) in constant currency.

From a geography perspective, emerging markets like Latin America and India clocked double digit growth of 12.5 per cent and 10.3 per cent sequentially.

North America grew 2.2 per cent quarter-on-quarter, while the UK was up 1.7 per cent.

Photograph: Reuters