TCS Q3 Net Income Up 8.2% to Rs 11,735 Cr - Strong India Growth

Mumbai, Jan 11 (PTI) Largest software exporter Tata Consultancy Services (TCS) on Thursday reported an 8.2 per cent growth in net income for the December quarter at Rs 11,735 crore, driven by a massive growth in the home market that offset to a large extent the impact of a 3 per cent degrowth in the US market.

The top management of the Tata Group company said its revenue for the reporting quarter grew 4 per cent to Rs 60,583 crore driven by a strong double-digit growth in emerging markets, led by the home market on the back of a massive project from the state-run telco BSNL.

The management, led by chief executive K Krithivasan, said the net income was impacted by a USD 125 million out of the USD 140 million charge it had taken for a legal settlement in the US during the quarter.

The operating margin improved by 50 bps to 25 per cent; and 70 per cent of the gain was led by improved productivity and 25 per cent due to forex gains, the company said, while net margin stood at 19.4 per cent, chief financial officer Samir Seksaria told reporters.

The company also declared a payout of Rs 27 a share including an Rs 18/share special dividend, which has the record date on January 19. The dividend comes on the heels of a mega Rs 17,000-crore buyback last month.

The order book stood at USD 8.1 billion, the company said, adding the net cash from operations stood at Rs 11,276 crore.

The chief operating officer and executive director N Ganapathy Subramaniam expressed confidence in his sales team to maintain the order book flowing into the next quarters.

The industries' segment growth was led by the energy, resources and utilities verticals which grew 11.8 per cent, manufacturing grew 7 per cent, and life sciences and healthcare grew 3.1 per cent.

Among the major markets, England continued with its stellar show for the fourth quarter with an 8.1 per cent growth; Continental Europe grew 0.5 per cent.

In the emerging markets, the home market India led with 23.4 per cent growth, the Middle East & Africa grew 16 per cent, Latin America grew 13.2 per cent, and Asia Pacific grew 3.9 per cent.

Both Krithivasan and Subramaniam, however, guided towards tepid quarters ahead saying, "it is too early to call the muted sentiment in the US because we have not yet seen any change in the sentiment on the ground level," and refused to predict when they will see a change.

Krithivasan credited "sustained cloud demand and operational excellence" along with "the very strong double-digit growth in emerging markets, led by India where it has clipped past 23.4 percent growth in orders" for the reasonably good shown in the traditionally weak quarter.

Subramaniam said the record India growth was led by the BSNL 4G/5G network roll-out and MCX platform deal which is scaling well and processing record transaction volumes.

Milind Lakkad, the HR head, expressed satisfaction that its attrition level has stabilized at 13.3 per cent and without offering an absolute hiring number, he said TCS has been the first to enter the campuses this year.

He described the 10,669 net fall in the bench-strength to 6,03,305 from 153 nationalities in the quarter-end as comfortable and expressed the hope that it stabilizes at that level. As much as 35.7 per cent of the total workforce are women.

On the generative AI training, he said with the joint effort with Nvidia, the company has already trained 14,000 personnel on GenAI so far and another 17,000 are on course for the next batch of training.

Of the total 6-lakh-plus headcount the company has already internally trained as much as 1.68 lakh on this new disruptive technology so far.

When asked Lakkad told PTI that as much as 65 per cent of its workforce are reporting to their offices, while others are still following a hybrid model. But he refused to set a time-line for everyone to report to work in office, saying "the world has undergone tremendous changes and we have to understand this. So long our productivity does not suffer, the present set-up is fine with us."

On hiring, he refused to put a number and attributed the net fall in the headcount this year to the massive hiring it had done in the past three years.