Leading IT service company Tata Consultancy Services(TCS) reported a consolidated net profit surge of 29% to Rs.96.24 billion in the three months ended September 30, from Rs 74.75 billion a year earlier.
The company’s net profit growth was boosted by growth in its vital banking and financial services sector as well as by strong demand for digital services during the COVID-19 pandemic. TCS is the first among peers to report earnings for the quarter, with investors looking at the forerunner to gauge the sector’s outlook that has witnessed a spectacular run in the past year.
According to Refinitiv data, the Mumbai-headquartered company’s Analysts, on average, had expected a profit of ₹96.01 billion. TCS’s consolidated revenue from operations also increased 16.8% to ₹468.67 billion, with the banking and finance industries-focused segments posted a net profit surge of 14.3%.
TCS noted it added five more customers in the $100-million-plus range in the quarter compared with 2020, bringing the total to 54. The IT giant also reappointed Rajesh Gopinathan as its CEO and managing director for five years. The tech major also announced an interim dividend of ₹7 per share.
TCS also added a net of 19,690 people, taking its total headcount to 5,28,748 people. TCS CEO stated that the solid and sustained demand environment was a ‘once-in-a-decade opportunity’ to position the company as clients’ preferred transformation and growth partner.
“We are using the growth tailwind to invest in further strengthening crucial capabilities and building out a comprehensive portfolio of offerings that caters to a larger set of stakeholders in the enterprise across several business cycles, strengthening our brand, and making our business more resilient.”, says Mr. Gopinathan. He added that they believe this is the most sustainable pathway to create longer-term value for all their stakeholders.
TCS Chief Financial Officer Samir Seksaria said strong growth and disciplined execution helped them overcome headwinds from supply-side and currency inflation and deliver expanded margins. He added that their industry-leading profitability and strong cash conversion give them the money to make the investments needed to build out the future business.
TCS and rivals HCL Technologies, Infosys, and Wipro, have won large contracts from businesses investing in services including crypto-platforms, cloud-computing, digital payment infrastructure, and cybersecurity over the last year.