TCS Q3 results out: PAT up by 11%

India’s top IT company Tata Consultancy Services Ltd has kickstarted the earnings season for Q3 FY23, by reporting a lower-than-expected profit at ₹10,846 crore. Analysts on an average expected a profit of ₹11,046 crore, according to Refinitiv data. TCS Q3 results are out, read here.

TCS Q3 results

Operating Margin during October-December 2022 quarter came at 24.5%; contraction of 0.5% YoY. It however has expanded from 24% in the previous quarter of September 2022. Its Operating Margins are likely to remain flat owing to moderation in supply-side constraints. The Net Margin at 18.6%.

The IT major said that its revenue came at ₹58,229 crore, up 19% (YoY), +13.5% YoY in constant currency (cc). TCS’ PAT for the third quarter rose by nearly 11% to ₹10,846 crore as compared to ₹9,806 crore in last quarter. The profit is up by 4% from ₹10,431 crore in the previous quarter.

The company’s overall workforce declined by 2,197 to 6,13,974 as on December 2022. Its attrition has dropped to 21.3% from 21.5%, and the quarterly annualised attrition has fallen nearly 6%.

The IT stock had hit a 52-week high on January 18, 2022 at ₹4,045.50 per share. And a 52-week low on September 26, 2022 at ₹2,926.

TCS’ board has announced third interim dividend of ₹75 per share including special dividend of ₹67 per share.

Comments

Milind Lakkad, Chief HR Officer, said: “Our focus over the last few quarters on bringing in fresh talent at scale, training them on new technologies and making them productive is paying off. We are particularly proud of having 125,000 TCSers at middle and senior levels who have been with the company for more than 10 years on average. They have been central to the successful cultural integration of all the fresh talent we have onboarded in the last couple of years, and their contextual knowledge and customer-centricity have been key to the high level of customer satisfaction that TCS is known for.”

Samir Seksaria, Chief Financial Officer, said: “Improved productivity, currency support and abating supplyside challenges helped expand our operating margin in Q3. This gives us greater confidence in our ability to steer our profitability towards our preferred range, while continuing to invest in building newer capabilities to support our growth and market share gains.”

Rajesh Gopinathan, CEO and MD, said: “We are pleased with our strong growth in a seasonally weak quarter, driven by cloud services, market share gains through vendor consolidation, and continued momentum in North America and UK. The sustained strength of demand for our services is a validation of the value we provide to our clients in helping them differentiate themselves, while enhancing their competitiveness. Looking ahead, and beyond current uncertainties, our longer-term growth outlook remains robust.”