Despite macroeconomic concerns coming in the quarter, IT major Tata Consultancy Services reported a 11 per cent growth in net profit to ₹10,846 crore in the third quarter of FY23, versus a profit of ₹9,679 crore reported in the same time last year.
On a quarter-on-quarter basis, profits for the IT major rose by 4 per cent from ₹10,431 crore logged in during second quarter of the current fiscal.
Overseas markets
As the global economic downturn begins, the North American and United Kingdom markets are resilient for the IT company. The European market performed worse for TCS, wherein the executives see the future recovery timeline as “uncertain.”
Rajesh Gopinathan, CEO of TCS, said, “The UK performed well despite challenging operating conditions; in this region, we will experience medium-term uncertainty. The macroeconomic downturn is yet to begin in the States fully. However, we believe that it will resolve itself quickly.” The US and the UK make two-thirds of the revenue for the IT major. Gopinathan added that solid performance in India contributed to the IT major’s strong financials in Q3FY23.
Revenue from operations during the quarter under review grew year-on-year by 19.1 per cent to ₹58,229 crore (₹48,885 crore)
The IT major saw some recovery sequentially in its operational margins, reporting a margin of 24.5 per cent for Q3 FY23 versus 24 per cent reported in the previous quarter. The IT company is yet to reach its target margin of 25 per cent.
The order book for the IT company was $7.8 billion for Q3FY23, versus an order book of $8.1 billion for Q2 FY23.
Per the executives’ commentary, the supply-side concerns are slowly starting to abate, with LTM attrition at 21.3 per cent in IT Services for Q3FY23 versus 21.5 per cent reported in the previous quarter. Due to seasonal lay-offs, the net additions for the company were a negative 2,197.
Milind Lakkad, EVP and the Head of Human Resources TCS, added that for FY24, the company would continue to maintain its target of hiring around 40,000 freshers and 125,000 associates, despite demand-side pressures.
Cloud biz
N Ganapathy Subramaniam, Chief Operating Officer, highlighted that cloud transformation is proving to be a key driver of revenues for the IT company.
The company announced a dividend of ₹75 per share. It will have an interim dividend of ₹8 per share and a special dividend of ₹67 per equity share. It will be paid on February 3.