Financial Performance Overview

Tata Consultancy Services (TCS) has announced a net profit of Rs 12,380 crore for the December quarter of the current financial year, reflecting an 11.95% growth compared to Rs 11,058 crore in the same period last year. However, the profit figure for the September quarter stood at Rs 11,909 crore, indicating a slight sequential increase.

  • Revenue Growth: The company recorded a revenue increase of 5.6% to Rs 63,973 crore, compared to Rs 60,583 crore in the same period last year. However, revenue was marginally lower than the Rs 64,259 crore reported in the September quarter.
  • Operating Margin Improvement: The operating profit margin rose to 24.5%, up from 24.1% in the previous year.

Dividend Announcement

TCS declared an interim dividend of Rs 10 per share along with a special dividend of Rs 66 per share, totaling Rs 76 per share. The record date for the dividend is set as January 17.

Major Revenue Sources and Key Deals

The company highlighted that a significant share of its revenue during the quarter was driven by its partnership with BSNL.

  • BSNL Deal: TCS is in the final stages of a Rs 15,000 crore deal with BSNL to establish data centers and 4G sites across India. Revenue impact from this project is expected from the fourth quarter onward.
  • Other Orders: The BFSI segment secured orders worth $3.2 billion, while consumer business orders amounted to $1.3 billion.

Impact of External Factors on Business

TCS stated that its operations would remain stable despite potential changes in U.S. policies under new leadership. The company’s reliance on H-1B visas is limited, ensuring continuity in business activities.

Strategic Investments and Asset Purchases

  • TCS has acquired land in Bengaluru for Rs 1,625 crore from a Tata Group company to support future expansion.

Workforce and Recruitment Plans

  • Employee Count: The company’s total workforce declined by 5,000 employees during the quarter, bringing the headcount to 6.07 lakh as of December. The attrition rate was reported at 13%.
  • Impact of Gen AI: TCS assured that the adoption of Generative AI (Gen AI) would not lead to job losses. Instead, it is expected to drive net job creation. Approximately 10-12% of large contracts will incorporate Gen AI technology.
  • Campus Recruitment: The company’s 2024-25 hiring target of 40,000 campus recruits is on track, with plans to expand campus recruitment efforts further next year.