TCS Q4 revenue rises 3.5%, misses street estimate

The $254-billion Indian IT sector’s clients have been curtailing spending on discretionary projects amid inflationary pressures and recession fears in key markets such as the US and Europe.

For fiscal year 2024, TCS’ revenue growth fell to 3.4% after adjusting for currency fluctuations, compared with 13.7% growth in the previous fiscal year. “We believe that we are bottoming out. I don’t want to call it, but we should start seeing growth (in its largest market and vertical) soon with a healthy pipeline over the last few quarters,” CEO K Krithivasan said.

He said: “We are very pleased to close Q4 and FY24 on a strong note with the highest ever order book and a 26% operating margin, validating the robustness of our business model and execution excellence. In an environment of global macro uncertainty, we are staying close to our customers and helping them execute on their core priorities with TCS’ portfolio of offerings, innovation capabilities and thought leadership.”

TCS said growth was led by India (37.9%), UK (6.2%) and manufacturing (9.7%). Revenue in North America, which accounts for half of TCS’ total revenue, slipped 2.3% in the fourth quarter, while revenue from banking, financial services and insurance clients, its biggest vertical, fell 3.2%.

The company’s operating margin was at 26% for the quarter. It announced an interim dividend of `28 per equity share. Its shares closed 0.45% higher at `4,000.30 on the BSE Friday.

N Ganapathy Subramaniam, Chief Operating Officer and Executive Director of TCS, said: “Our Q4 performance is robust, with broad based deal wins across industries and geographies. Our products and platforms business sparkled with the mega deal win at Aviva and emerging markets had another stellar growth quarter demonstrating the power of TCS’ diversified portfolio.”

TCS’ workforce stood at 601,546 as on March 31, 2024. The employee base is diverse with 35.6 per cent women and 152 nationalities, it said.

Chief Financial Officer Samir Seksaria said: “In FY 2024, our disciplined approach to operations have helped us expand our industry-leading margins. In a challenging environment, we persisted with our long-term investments in workforce reskilling, research and innovation.” with reuters