TCS Double Digit Growth Further Accelerates In Q3

Tata Consultancy Services the leading IT services, consulting and business solutions firm reported its consolidated financial results according to Ind AS and IFRS for the period ending December 31, 2018.

Financial highlights for the quarter ended December 31, 2018

• Revenue at USD 5250 Million, +9.7  percent YoY
• Constant Currency revenue growth: +1.8 percent QoQ and +12.1 percent YoY
• Net Income at USD 1140 Million, +12.7 percent YoY
• Operating Margin at 25.6 percent, an expansion of 0.4 percent YoY
• Earnings Per Share at USD 0.3, +15.0 percent YoY
• Net Cash from Operations at 107 percent of Net Income
• Dividend per share of Rs. 4.00

Business highlights for Quarter ended December 31, 2018

• BFSI growth continues to accelerate: +8.6 percent YoY (+6.1 percent YoY in Q2)
• Digital revenue: 30.1 percent of total, +52.7 percent YoY
• UK and Europe lead growth: +25.1 percent YoY and +17.6 percent YoY respectively
• Continued investment in organic talent development: 292K+ employees trained in digital technologies; 318K+ employees in Agile methods
• Industry-leading talent retention: IT Services attrition rate at 11.2 percent LTM

Commenting on the Q3 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said, “We are wrapping up 2018 with strong revenue growth of 12.1% in the December quarter, which is the highest in 14 quarters, with continued growth acceleration in key verticals and across all geographies. The strong client metrics, industry-leading growth in digital services, a very strong order book and deal pipeline are all validations that customers recognize our differentiated capabilities and are picking us for their growth and transformation programs.”

He added, “On a secular basis, as large segments of the economy go through churn was driven by digital disruption, enterprises are responding with technology-powered strategies – as in algorithmic retailing or connected cars – creating a huge opportunity for services providers like us. Our investments in research and innovation, our deep domain and contextual knowledge, intellectual property and our collaborative approach to co-innovation, have been key to our participation in this opportunity. This quarter, we launched a new brand, TCS Pace™ embodying these capabilities and offering our customers a line of sight to success in a Business 4.0 world.”

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said, “This has been a very satisfactory quarter in terms of revenue growth as well as operating metrics. The investments that we have been making in building newer capabilities and frameworks are starting to bear fruit. Our location independent Agile methodology and Machine First™ approach have been key in helping us advance CEO-level enterprise transformation agendas.”

V Ramakrishnan, Chief Financial Officer, said, “Despite headwinds from the Rupee volatility against various currencies, and the higher cost of doing business in some major markets, our operating margins have been resilient. We remain focused on driving rigor in our operations, generating strong cash flows and steering profitability back to our preferred range, while continuing to invest strongly for future growth.”―CT Bureau