Tata Consultancy Service (TCS) on Monday reported a 7.29 per cent jump in profit to ₹9,959 crore, for the quarter ended March 31, 2022 (Q4 FY22), up from ₹9,282 crore reported in the same quarter last year.
The profit was up 1.53 per cent on a q-o-q basis, too, from ₹9,806 crores in Q3. For the full year 2021-22, profits grew by 18.08 per cent to ₹38,449 crore, as compared to ₹32,562 crore in FY21.
Revenue from operations was in line with market expectation touching ₹50,591 crore, up 15.76 per cent y-o-y from ₹43,705 crore in Q4 FY21. Consequentially, revenues were up 3.49 per cent q-o-q. TCS ended FY22 with ₹1.95-lakh crore in revenue, up from ₹1.67 lakh crores in FY21.
The company also reported the highest-ever order book total contract value (TCV) at $11.3 billion, a significant q-o-q increase from $7.6 billion.
“This includes a couple of very large deals of close to a billion dollars. But even after excluding these mega deals, it (the TCV) stands at $9.5 billion. Our services are resonating well with the market,” said Rajesh Gopinathan, CEO and MD, TCS, addressing the media.
He added that the deal pipeline might slow down in the coming quarter, though the company will continue to have a good spread of big deals. This quarter, TCS added 10 new clients in the $100-million plus bucket, 19 in the $50-million plus bucket, 40 in the $20-million plus bucket and 52 in the $10-million plus bucket.
Sector wise, this quarter retail and CPG recovered well, growing by 22.1 per cent, manufacturing vertical grew over 19 per cent, BFSI at over 16.7 per cent, tech and services grew over 15.8 per cent and communications and media by over 14 per cent.
Attrition and hiring
TCS’ attrition reached 17.4 per cent in Q4 on LTM (last twelve months) basis, up from 15.3 per cent in Q3. Same time last year, it was 7.2 per cent. This, despite the IT major adding 35,209 employees — its highest ever in a quarter.
“The attrition rate continues to tick up on an absolute basis, but on a month-on-month basis, it has started to flatten,” Gopinathan said.
Similar to FY22 hiring targets, TCS plans to add 40,000 freshers in the first quarter of FY23. In FY22 overall, the company added over 1,00,000 freshers. The company is currently actively working on its major four-division restructuring plans, through which it wants to create a customer-centric and relationship-building kind of an approach with the clients. The plan became operational since April 1.
The company’s operating margins remained flattish this quarter, though leading the industry at 25 per cent. For FY22, it stood at 25.3 per cent.
“In the long-term we are well placed to improve. There might be some volatility in the short term and we will double down on our levers in the mid-term. This will come from better realisation, including pricing and engagement, better portfolio mix; and operating levers like automation and productivity. We look forward to support from the currency as well,” Samir Seksaria, CFO, TCS, said.
April 11, 2022