Tata Consultancy Services logo is seen in this illustration.
Credit: Reuters File Photo
Bengaluru: Beating market expectations, IT services bellwether Tata Consultancy Services on Friday posted a 6.8 per cent year-on-year growth in revenue from operations to Rs 2.4 lakh crore for the financial year ended March 31, 2024.
A sequential quarter-on-quarter growth of 1.1 per cent in revenue from operations added to its annual performance cheer. The company, sharing a positive outlook for FY25, announced pay hikes across-the-board.
Led by business flowing in from the UK and regional markets, revenue in the January-March quarter of FY24 grew 3.5 per cent annually to Rs 61,237 crore, as per the company statement.
“We do believe that regional markets will continue to grow…The reason that we say FY25 would be better than FY24 is also based on the fact that we believe that major markets will also start turning around some time,” TCS Chief Executive Officer and Managing Director K Krithivasan said during the post earnings press conference.
Biswajit Maity, who is a senior principal analyst at global management consulting firm Gartner credited the company’s noteworthy performance to its “enduring client partnerships”. Other sectoral experts, who spoke to DH, unanimously echoed that TCS is likely to outperform the other giants in the industry vis-a-vis the fourth quarter results.
The country’s largest software exporter will once again attempt to hit its average target of onboarding 40,000 trainees annually, as they did last year, during the ongoing financial year, company Chief Human Resources Officer Milind Lakkad said.
“I am very pleased to announce wage hikes for everyone, starting April. Wage hikes will range from 4.5-7 per cent, depending on the performance, and then top performers getting double digit hikes,” Lakkad added. He also underscored that freshers from the FY24 batch, who are yet to be onboarded, will be brought on board in the June quarter.
Attrition at the Mumbai-headquartered IT conglomerate during the three month-ended March 31, 2024, was recorded at 12.5 per cent, bringing the present headcount to 6,01,546.
With a year-on-year rise of 100 basis points, net margin during the fourth quarter stood at 20.3 per cent, wherein subcontracting costs, which are seen to be bottoming out, played a role, according to the company. The company’s net profit beat Dalal Street estimates, growing 9.3 per cent year-on-year to Rs 12,502 during the three month period.
Meanwhile, record deal wins worth $13.2 billion during the quarter took the company’s overall order book to an all-time high of $42.7 billion for the full financial year 2023-24.
“On the TCV (total contract value) side, excepting one large deal, this is made up of regular sized deals…There is acceleration of cost-optimisation and slowly they (clients) are investing on transformation. The TCV that we have been getting (recently) is yielding revenue,” Krithivasan said.
Among verticals, annual growth during the March quarter was led by energy, resources and utilities (12.6 per cent), followed by manufacturing (7.3 per cent) and life sciences and healthcare (4.8 per cent). The banking, financial services and insurance segment, on the other hand, was a laggard declining 1per cent annually.
The board of the company also approved a final dividend of Rs 28 per share for the financial year 2023-24, TCS said.
Talking about the IT major targeting large deals, Meity said: “TCS needs to closely monitor its services to ensure that the substantial increase in workload does not adversely affect the overall quality of service promised to its clients.”