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Business News/ Companies / Company Results/  TCS posts 15% jump in Q4 profit
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TCS posts 15% jump in Q4 profit

Revenue grew 9.4% from a year earlier to ₹43,705 crore, beating the ₹43,505.60 crore consensus estimate in a Bloomberg poll. For FY21, revenues stood at ₹1.64 trillion.

Shares of TCS have gained about 7% in the past month amid investor optimism. On Monday, TCS shares fell 2.43% to ₹3,241.45 on BSE (Photo: Mint)Premium
Shares of TCS have gained about 7% in the past month amid investor optimism. On Monday, TCS shares fell 2.43% to 3,241.45 on BSE (Photo: Mint)

BENGALURU : Tata Consultancy Services (TCS) Ltd on Monday said fiscal fourth-quarter profit rose 14.9% from a year ago, in line with analysts’ estimates, as the pandemic spurred demand for digital services. Net profit rose to 9,246 crore in the three months ended 31 March. That compares with the 9,274.30 crore analysts had estimated in a Bloomberg survey.

Revenue grew 9.4% from a year earlier to 43,705 crore, beating the 43,505.60 crore consensus estimate in a Bloomberg poll. For FY21, revenues stood at 1.64 trillion.

Chief executive Rajesh Gopinathan said TCS is eyeing new revenue streams and opportunities in digital transformation in FY22.

“Our investments over the last decade in building newer capabilities, and in research and innovation, position us well for the multi-year technology services opportunity ahead. While we continue to dominate in our traditional areas of strength, we are making good progress in gaining share in the growth and transformation opportunity. Our focus going into FY22 will be to engage with clients in their growth agenda, propelled by innovation and leverage of collective knowledge," Gopinathan said.

The closely watched dollar revenue for the quarter grew 10% from a year earlier to $5.98 billion on the back of highest-ever deal closures worth a total contract value of $9.2 billion.

The earnings validate analysts’ expectations of a coronavirus boost to the growth momentum of major Indian IT companies. The pandemic has forced companies to adopt various digital transformation initiatives to meet customer requirements.

TCS said operating margin widened to 26.8% in the March quarter from 26.6% in the preceding three months on better execution.

“Our Q4 margins are a validation of our strong belief that it is possible to win mega-deals, post industry-leading growth, continue to invest in our people and in newer capabilities, and still deliver industry-leading profitability. All the investments that we have been making over the years position us strongly to expand our footprint in the large growth and transformation opportunity," said V. Ramakrishnan, chief financial officer, TCS.

The financial services sector, which contributes about 30% to TCS’s revenues, grew 7% sequentially in constant currency. The retail and consumer packaged goods sector, the second largest vertical, grew 4% sequentially.

“Last year, TCS’s revenue growth momentum was impacted due to the pandemic situation, but it had a successful year to grow its business. The impact of covid may last for some more time as the world recovers. Overall, TCS has a healthy financial position, which will prove crucial as enterprises move through the global health crisis," said D.D. Mishra, senior research director at Gartner.

The attrition rate, on a trailing 12-month basis, dropped to an all-time low of 7.2% in Q4 from 7.6% in Q3. The company employed 488,649 people as of 31 March. Shares of TCS have gained about 7% in the past month amid investor optimism. On Monday, TCS shares fell 2.43% to 3,241.45 on BSE. The company’s earnings were announced after the end of trading in Mumbai.

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Published: 13 Apr 2021, 12:35 AM IST
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