Digital deals help TCS report a strong Q4; net profit jumps to 6,904cr

MUMBAI, INDIA: The largest IT services company of India, Tata Consultancy Services (TCS) on Thursday beat analyst expectations by reporting a 5.7 percent jump in the consolidated profit at Rs 6,904 crore for the quarter ended March 2018. The company reported Rs 6,531 crore profit in the previous quarter.

The Q4 revenue stood at Rs 32,075 cr, up 3.8% QoQ and 8.2% YoY. Revenue in dollar terms increased 3.9% to USD 4,972 million in Q4. The company is also back on a double-digit growth trajectory with 11.7% YoY jump in revenue. The incremental revenue of $1.51 billion is also highest in the last three years. 

Digital engagements contributed 23.8% of revenue in Q4, a growth of 42.8% YoY. The company won several large, multi-practice integrated deal with customers leveraging more and more digital technologies to drive their growth and transformation agendas.

Rajesh Gopinathan, CEO and MD, said, “Strong demand in digital across all industry verticals and large transformational deal wins have made this one of our best fourth quarters in recent years. The strong exit allows us to start the new fiscal on a confident note.”

N. Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said, “We are executing on our Business 4.0 strategy and that is paying off very well. Our participation in our customers’ digital spending is expanding ahead of the industry. Six of our industry verticals grew above the company average in FY 18, four of them growing double digits. Strong deal wins and a good pipeline positions us very well in the new fiscal.”

All industry verticals except BFSI grew above the company average, with three verticals growing in double digits YoY. Growth was led by the Energy & Utilities vertical (+33.7%), Travel & Hospitality (+25.4%) and Life Sciences & Healthcare (+12.6%).

Geography-wise, Continental Europe (+19.1%YoY), UK (+10.7%YoY) and Asia Pacific (+8.6%YoY) led the growth. North America grew 4.9% YoY.

In FY18, TCS added 3 clients in USD 100M+ band, 13 clients in USD 50M+ band, 17 clients in USD 20M+ band and 40 in USD 10M+ band.

The IT services attrition rate in the last twelve months also fell by 0.1 percent in Q4 to 11 percent, while the total attrition rate (including BPS) fell to 11.8 percent.