TCS third quarter net profit down 3.6 per cent

On a sequential basis, net profit rises by 1.3% in the December 2017 quarter.

By: ENS Economic Bureau | Mumbai | Published: January 12, 2018 2:26 am
TCS news, TCS shares, TCS shares rise, Rise in TCS shares, TCS shares news, Business news, India Business news, India news, National news, Latest news, TCS shares closed 0.67 per cent down at Rs 2788.40 on the BSE on Thursday.

Tata Consultancy Services (TCS), India’s largest IT firm, has reported a 3.6 per cent decline in net profit to Rs 6,531 crore in the December 2017 quarter as against a profit of Rs 6,778 crore in the same period of the previous fiscal. However, on a sequential basis, the net profit rose by 1.3 per cent in the quarter.

The company’s income from operations during the quarter under review stood at Rs 30,904 crore, up 3.9 per cent from Rs 29,735 crore in the year-ago period, as per Indian Accounting Standard (Ind-AS). The company has declared a dividend of Rs 7 per share.

Rajesh Gopinathan, CEO and MD, said, “We wrapped 2017 with a strong performance in the December quarter, marked by the signing of industry-defining deals, robust client metrics and broad-based demand across industry verticals. As lagging parts of our portfolio turn around, and areas of softness reduce, we are well placed for stronger growth ahead.”

TCS shares closed 0.67 per cent down at Rs 2788.40 on the BSE on Thursday. “Progressive organisations looking to take advantage of new opportunities in the Business 4.0 era are ramping up their digital investments, and TCS has emerged as their preferred transformational partner. We signed our first $ 50 million plus deal in digital this quarter, crossing an important milestone in the mainstreaming of digital technologies. The investments we have been making over the last few years in research and innovation, and in building intellectual property, are giving us a distinct edge in the market in winning such large transformational programs,” Gopinathan said.

TCS said its operating margin was at 25.2 per cent, an expansion of 0.1 per cent on a quarter-on-quarter basis. Retail vertical turned around with a growth of 3 per cent on year-on-year basis and 6.4 per cent in the September quarter. Digital revenue stood at 22.1 per cent, up 39.6 per cent in the same period of last year.

N Ganapathy Subramaniam, COO and executive director, said, “we had a very good quarter marked by excellent operating metrics all across. New deal ramp-ups, increasing traction in digital, robust demand pick up in retail and continuing momentum in most of our industry verticals gave us strong volume growth in a seasonally weak quarter. Our reputation for superior execution, combined with our platform capability, positions us well to close mega deals.”

“Concerted efforts by all our teams and tighter working capital management resulted in very strong cash conversion this quarter. The long view we have historically taken with many of our key investment decisions, be it our geographic forays or new cloud-based platform businesses, is now beginning to yield results. Several of the key deals we signed this quarter, are a vindication of that strategic patience,” said V Ramakrishnan, chief financial officer.

TCS said the total employee strength at the end of Q3 stood at 390,880 on a consolidated basis, with gross addition of 12,534 employees and net addition of 1,667 employees during the quarter. “Localisation initiatives continue to progress well, with 2,929 employees recruited outside India in Q3, bringing the total to 9,908 in FY 18, year to date,” it said.

The IT services attrition rate (LTM) fell by 0.2 per cent in Q3 to 11.1 per cent, while the total attrition rate (including BPS) fell to 11.9 per cent.

The percentage of women in TCS rose further to 35.2 per cent in Q3. The total number of nationalities represented in the workforce stood at 131.

“Our core philosophy of investing in our people and empowering them, and in creating employee-friendly workplaces, is resulting in an engaged, energized and empowered workforce that is central to our continued success,” said Ajoy Mukherjee, executive vice president and Global Head, Human Resources.

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