MUMBAI: Shares of Tata Consultancy Services Ltd (TCS) jumped nearly 8% in early deals on Friday despite reporting a dip in its January-March net profit. The company though reported a robust order book -- its largest ever-- during the quarter.
At 12:30 pm, the stock traded at ₹1812.90, up 5.7% from its previous close, while the benchmark Sensex was up 1.7%. The BSE IT index was also higher at 1.98%.
The software behemoth reported a net profit of ₹8,093 crore for the quarter ended March, down 0.8% sequentially and missing analyst estimates. Revenue also missed analyst estimates but rose 5.1% year-on-year to ₹39,946 crore.
Analysts had expected TCS to report revenues of ₹40,317.3 crore and a net profit of ₹8,159 crore in the reporting quarter, factoring in weakness in March operations globally due to the covid-19 pandemic.
Rajesh Gopinathan, chief executive officer and managing director, said, "The pandemic completely reversed the positive momentum that we had started seeing in some of our biggest verticals in the first half of the quarter. On the positive side, we had very strong deal closures during the quarter. In fact, our order book this quarter is the largest ever, from the time we started reporting the metric."
"Organisations across the world are realizing the need for operational and systems resilience. Many of the large deals we signed during the quarter address precisely that need. They are core transformation programs that leverage the power of technology to make our customers' operations leaner, faster, and more resilient."
The company management noted that impact of the lockdown was limited to last two weeks of March.
TCS' revenue growth in the March quarter was led by Life Sciences & Healthcare (+16.2%), Communications & Media (+9.3%) and Manufacturing (+7%). Retail & CPG grew +4.2% and Technology & Services grew +3.5%. BFSI revenue declined 1.3%.
From a geographical perspective, growth in Q4 was led by Europe (+11.9%) and UK (+5.4), Latin America grew +39%, Asia Pacific grew +3.5% and MEA grew +13%. North America grew +0,2% while India declined 1.9%.
N Ganapathy Subramaniam, chief operating officer & executive director, said, “Despite the lockdowns, I am pleased that our customers continue to experience the same energy and delivery certainty from TCS as before. As for the operating metrics, I am particularly happy with the robust client metrics this quarter, with strong additions across most revenue buckets."
TCS declared a final dividend of ₹6 per equity share for the financial year 2019-20. The company added 24,179 employees in the year gone by to take its total to 4.49 lakh.
TCS is an IT services, consulting and business solutions company. It offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions.
V Ramakrishnan, chief financial officer, said, “We have digitized virtually all our processes and invested in infrastructure and collaboration tools to support our Location Independent Agile delivery model and Secure Borderless Workspaces. As we enter a difficult and uncertain period, our strong balance sheet, profitability and the inherent resilience of our business model position us well to navigate the challenges ahead and gain share."