After missing market expectation for six straight quarters, TCS bounced back in the fourth quarter, posting a massive 64.4 per cent jump in net profit to ₹6,341 crore from ₹3,858 crore in the corresponding quarter last year. The growth has been primarily driven by the digital business and a strong performance in the core portfolio.
“Our core portfolio performed strongly in a seasonally weak fourth quarter, driven by strong volumes led by growth in the BFSI, retail and manufacturing sectors. This gives us good momentum going into the new financial year,” said TCS’ Chief Executive Officer and Managing Director N Chandrasekaran
“Our investments in building high-impact digital platforms are paying off, resulting in over $2.3 billion in digital revenues,” he added. Revenue for the quarter grew about 17.5 per cent to ₹28,449 crore from ₹24,219 crore last year. Sequentially, TCS’ profit and revenue have grown about 4 per cent.
The fourth quarter saw broad-based growth with the core portfolio performing strongly led by BFSI (3.2 per cent Q-o-Q), manufacturing (3.9 per cent Q-o-Q) and retail (2.1 per cent Q-o-Q).
On the volume front, TCS managed to beat Infosys with 3.2 per cent growth, while the latter reported a growth of 2.4 per cent.
“TCS is the second IT major to beat expectations this season despite many significant changes in the macro economic environment in territories where their key clients operate. This is a clear reassurance that the investment made earlier to reinvent themselves in the light of global acceptance of the digital business, the impact of cloud and other contemporary technologies are now starting to pay dividends,” said Sanjoy Sen, Doctoral Research Scholar, Aston Business School, UK.
The good thing for the company is that the headwinds that had pulled down its performance for the last six quarters seem to have dissipated. “The insurance segment has turned a corner. In terms of Latin America, that has been doing well last quarter and even this quarter they've done well and as we go into the next year, it looks good. Our energy and utilities division has also done well and as we go into the future, we expect that business will continue to do very well,” Chandrasekaran said.
No comment on penalty However, the $940 million penalty imposed by a Wisconsin jury could weigh heavily on the company if it losses the legal proceedings. Chandrasekaran declined to comment on the case.
During the January-March quarter, TCS added 22,576 employees (gross), while on a net basis the addition was 9,152, taking the overall employee strength close to 3,54,000. For the full year, the company added a gross 90,182 employees.