The earnings season made a sedate start with Tata Consultancy Services (TCS) reporting mixed numbers for the third quarter ended December 31.

The country’s largest IT services company reported an 11 per cent growth in net profits at Rs 10,846 crore which came below Street estimates even as revenues bettered expectations.

Analysts expected TCS to report net profits in the region of Rs 11,000-11,200 crore. It had reported a net profit of Rs 9,769 crore in the same period of the previous year.

The modest show by the IT giant in a seasonally lean quarter came amid challenging conditions, particularly in Europe and the UK.

Analysts fear if there is a recession in the US and Europe this year, it could have some impact on its growth trajectory.

During the quarter, TCS posted revenues of Rs 58,229 crore — a 19 per cent growth over Rs 48,885 crore in the same period of the previous year.

In dollar terms, revenue came in at nearly $7.08 billion against $6.52 billion, above the expectations of brokerages such as Emkay which had forecast revenues of $6.93 billion.

The highlight of the third quarter was the decline in headcount to 613,974 from 616,171 that pulled attrition down to 21.3 per cent from 21.5 per cent in the preceding three months.

Speaking to the press here on Monday, Rajesh Gopinathan, CEO & MD, said attrition has peaked and has now started trickling down. The company expects the trend to continue.

He pointed out to North America as the leader, growing 15 per cent in dollar revenues from a year ago.

TCS also saw good growth in the UK and Europe despite a challenging environment.

Replying to a query on demand trends, Gopinathan said different markets were behaving differently. While North America is vibrant, the environment in the UK remains challenging.

On the other hand, in Europe, the client decision-making is getting impacted by the geo-political situation which “requires close watching’’.

The TCS CEO said the actual demand environment and the decision making will be known only couple of months later.

In verticals, while BFSI (banking, financial services & insurance) saw a growth of 11.1 per cent over the same period of the previous year, retail grew 18.7 per cent and life sciences and healthcare. 14.4 per cent.

Shareholders of TCS had some reasons to cheer as the company declared a dividend of Rs 75 per share which included a special dividend of Rs 67 per share. While the record date for the third interim dividend and the special dividend is January 7, it will be paid on February 3.