Tata Consultancy Services (TCS) on Monday began the earnings season on a positive note by posting a 14.87 per cent growth in net profits for the March quarter of 2021, which came in line with Street estimates.
The strong numbers came as the country’s largest IT services firm reported a robust deal win of $9.2 billion as clients continued to spend on technology.
The company’s board of directors has recommended a final dividend of Rs 15 per share.
For the quarter, TCS posted a net profit of Rs 9,246 crore compared with Rs 8,049 crore in the same period of the previous fiscal. It marked a sequential 6.26 per cent growth over the net profit in the preceding quarter.
The quarter saw revenues at TCS rising to Rs 43,705 crore from Rs 39,946 crore in the year-ago period. In dollar terms, revenues came in at $5,989 million, a sequential growth of around 5 per cent from $5702 million in the preceding quarter.
The order book of $9.2 billion in the quarter is the highest total contract value (TCV) in any quarter, TCS said.
For the year as a whole, its order book at $31.6 billion saw a rise of 17 per cent over last year’s number.
“Our investments over the last decade in building newer capabilities, and in research and innovation, position us well for the multi-year technology services opportunity ahead.
“While we continue to dominate in our traditional areas of strength, we are making good progress in gaining share in the growth and transformation opportunity. Our focus going into 2021-22 will be to engage with clients in their growth agenda, propelled by innovation and leverage of collective knowledge,’’ Rajesh Gopinathan, chief executive officer and managing director of TCS, said.
The period also saw net margins rising by 1 per cent over the last year to 21.2 per cent.
According to V. Ramakrishnan, chief financial officer, TCS’ performance in the fourth quarter caps three quarters of consistent robust performance in a pandemic year, and gives the company a strong exit from 2020-21.
“Our fourth quarter margins are a validation of our strong belief that it is possible to win mega-deals, post industry-leading growth, continue to invest in our people and in newer capabilities, and still deliver industry-leading profitability. “
“All the investments that we have been making over the years position us strongly to expand our footprint in the large growth and transformation opportunity,’’ he added.
On the performance of its various verticals, TCS said that all of them showed good sequential growth, though a couple continue to lag prior year level. While BFSI showed a growth of 7 per cent sequentially, the growth of retail came in at around four per cent, life sciences and healthcare at 3.8 per cent over the preceding quarter and manufacturing at 3.9 per cent growth.
In terms of markets, the growth was led by major markets with Continental Europe showing a strong 8.5 per cent sequential growth, North America at 3.9 per cent and the UK at around 3.4 per cent.