The largest IT services player Tata Consultancy Services Ltd (TCS) on Thursday reported a 11.95 per cent year-on-year (YoY) rise in consolidated net profit at Rs 12,380 crore for the December quarter compared with Rs 11,058 crore in the same quarter last year. Net sales climbed 5.59 per cent to Rs 63,973 crore from Rs 60,583 crore in the corresponding period last year. Sales were up 4.5 per cent YoY in constant currency (CC) terms.
Operating margin for the quarter came in at 24.5 per cent, down 50 basis points YoY but up 40 basis points sequentially, in line with Street estimates. The IT major reported total contract value of $10.2 billion, which was higher than $7-9 billion deal wins that analysts projected earlier. Book to Bill ratio stood at 1.4.
TCS said its net cash from operations stood at Rs 13,032 crore i.e. 105.3 per cent of net income. The IT major said its trailing twelve-month IT services attrition rate came in at 13 per cent. At last count, TCS workforce strength stood at 6,07,354.
TCS Q3 dividend, history The TCS board declared dividend of Rs 10 per share and a special dividend of Rs 66. The software exporter had earlier announced dividends worth Rs 20 per share for FY25, Rs 10 each in Q1 and Q2.The third interim dividend and the special dividend shall be paid on Monday, February 3, 2025, to the equity shareholders of the Company, whose names appear on the register of members of the company or in the records of the depositories as beneficial owners of the shares as on Friday, January 17, 2025, which is the Record Date fixed for the purpose.
Last financial year, along with Q4 results, TCS had in April 2024 declared a final dividend of Rs 28 for FY24. TCS declared an interim dividend of Rs 9 per share and a special dividend of Rs 18 per share following its third-quarter results. In the second and first quarters, it also announced interim dividends of Rs 9 each. Additionally, TCS executed a Rs 17,000 crore share buyback program in FY24.
In total, TCS distributed Rs 46,223 crore to shareholders in FY24.
TCS Q3 growth drivers
The Q3 growth was led by Consumer Business Group (up 1.1 per cent), Energy, Resources and Utilities (up 3.4 per cent) and Regional Markets (up 40.9 per cent). Growth Markets continue to be lead by India (up 70.2 per cent), Middle East & Africa (up 15.0 per cent), Latin America (up 7 per cent) and Asia Pacific (up 5.8 per cent). North America witnessed a 1.5 per cent YoY fall in composition.
Management commentary
Chief Executive Officer and Managing Director, K Krithivasan, said: “We are pleased with the excellent TCV performance in Q3 which was well-rounded across industries, geographies and service lines lending good visibility to long-term growth. BFSI and CBG returning to growth, continued stellar run of Regional Markets and early signs of revival in discretionary spend in some verticals give us confidence for the future. Our continuing investments in upskilling, AI/Gen AI Innovations and partnerships sets us up to capture the promising opportunities ahead.”
Chief Financial Officer, Samir Seksaria, said the quarter saw significant cross-currency volatility, but TCS’s strong execution, cost management and deft currency risk management helped deliver healthy margin improvement and free cash flows.
Disciplined investments in talent and infrastructure should lend good support to long-term business growth, he said.
“We promoted over 25,000 associates this quarter which brought the total promotions this financial year to more than 110,000. We continue to invest in employee upskilling and overall well-being. Our campus hiring for the year is going according to plan and preparations are afoot to onboard a higher number of campus hires next year," said Chief HR Officer Milind Lakkad.