TCS Q3 PAT rises 4% QoQ to Rs 10,846 cr; declares total dividend of Rs 75/sh

The IT major's consolidated net profit rose 3.98% to Rs 10846 crore on 5.28% increase in net sales to Rs 58,229 crore in Q3 December 2022 (Q3 FY23) over Q2 September 2022 (Q2 FY23).

On a year-on-year (YoY) basis, the IT major's net profit rose 11.02% and net sales rose 19.11% in Q3 FY23.

Constant currency revenue grew 13.5% YoY. Operating margin fell 0.5% YoY to 24.5% in Q3 FY23. The company's order book stood at $7.8 billion.

Profit before tax rose 3.89% to Rs 14644 crore in Q3 FY23 as against Rs 14096 crore in Q2 FY23. Net cash from operations stood at Rs 11,154 crore i.e. 102.8% of net income.

The board declared a third interim dividend of Rs 8 and a special dividend of Rs 67 per share of Re 1 each of the company. The record date is on Tuesday, 17 January 2023.

Growth was led by Retail and CPG (18.7%) and Life Sciences & Healthcare verticals (+14.4%). Communications & Media grew +13.5% and Technology & Services grew +13.6%. Manufacturing grew +12.5% while BFSI grew +11.1%.

Among major markets, North America and UK led with +15.4% growth; Continental Europe grew +9.7%. In emerging markets, Latin America grew +14.6%, India grew +9.1%, Asia Pacific grew +9.5% and Middle East & Africa grew +8.6%.

In Services segment, growth in Q3 was led by Cloud, Cyber Security, Consulting Services and Enterprise Application Services.

TCS' workforce was at 613,974 as on 31 December 2022, a net reduction of 2,197 during the quarter. IT services attrition on an LTM basis trended down to 21.3% and is expected to fall further in the coming quarters.

Rajesh Gopinathan, chief executive officer and managing director, 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."

N Ganapathy Subramaniam, chief operating officer and executive director, said: "The year saw us embracing data, AI and ML holistically to disrupt ourselves and drive competitive advantage to our clients' businesses. All these augur well for our future as we step into 2023."

Samir Seksaria, chief financial officer, said: Improved productivity, currency support and abating supply-side 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."

TCS is an IT services, consulting and business solutions organization. It offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions.

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