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TCS net profit up 12%, revenue up 12% in Q3FY22

13 January 2022

TCS, which is the largest IT company by market capitalisation in India , declared its Q3 results on 12th January, 2022. In a first, the company decided to announce its results on the same day as that of peers – Infosys and Wipro. 

TCS posted a consolidated net profit of Rs. 9,769 crores for the quarter ended December, up 12% YoY.  TCS’ revenue from operations rose an impressive 16% to Rs. 48,885 crores from Rs. 42,015 crores reported in the corresponding quarter last year. 

TCS Q3 Fy22 Results Quick Look

  • Revenue from operations increased by 16.35% year on year. 
  • Profit for the period grw by 12.36% year on year. 
  • Addition of clients in  >$100 Mn and >$50 Mn categories. 
  • Dividend of Rs 7 per equity share.
  • Buyback valued at Rs 18,000 crore.
  • Women in the workforce crossed the 200,000 Mark.

Net cash from operations stood at Rs. 10,853 crores for Q3 FY22. Operating margins, however, stood at 25% for the quarter, down 1.6% YoY. This is likely, in large parts, due to the increased cost of employee retention.

The attrition rate rose to 15.3% on a trailing 12-month basis for TCS, it seems to be below that reported by peers Infosys at ~25% and Wipro at ~20%. 

The various segments of the company posted more than 15% growth seen in all sections. Led by its digital transformation business and a healthy Q3, the company has managed to register $25 billion in revenue in 2021. 

In the December quarter, TCS has also managed to add 10 new clients in the $100 million-plus category and 21 new clients in the $50 million-plus category.

TCS buyback proposal has been approved by the board. The proposal is to buy back up to 4 crore equity shares for an aggregate amount of around Rs. 18,000 crore. This is 1.08% of the total paid-up equity capital at Rs. 4,500 per share (at nearly Rs.643 premium from the current share price).

The company also declared an interim dividend of Rs. 7 per equity share. However, TCS closed 1.43% down at Rs.3859.90 at the end of the trading session for the day. 

Among major markets, growth was led by North America (+18%) and Continental Europe (+17.5%) while UK grew +12.7%. Among emerging markets, growth was led by Latin America (+21.1%) and India (+15.2%), followed by Middle East & Africa (+6.9%) and Asia Pacific (+4.3%).

Hits

  • The company’s net profit (consolidated) stood at Rs. 9,769 crore, up from Rs.8727 crores last year, an increase of 12.36%
  • Revenue from operations stood at Rs. 48,885 crores for the IT giant, from Rs. 42,015 crores, an increase of 16% 
  • The company announced an interim dividend of Rs.7 per share
  • TCS added 34,000 fresh graduates to its workforce for Q3FY21-22

Misses

  • Voluntary attrition stood at 15%
  • Operating margin down 1.6% YoY

Segment-wise revenue 

Have a look at how various segments performed on a YoY basis. 

  • Banking, Financial Services and Insurance – An increase of 14.06% from Rs. 16,655 crores to Rs. 18,998 crores YoY
  • Manufacturing – 17.25% increase YoY from Rs. 4,027 crores to Rs. 4,722 crores
  • Retail and Consumer Business- Increased 20% YoY from Rs. 6,546 crores to Rs. 7,852 crores
  • Communication, Media and Technology – An increase of  18.25% YoY from Rs. 6,980 crores to Rs. 8,254 crores
  • Life Sciences and Healthcare – 18.23% increase YoY from Rs. 4,372 crores to Rs. 5,169 crores
  • Others – Increased 13.25% YoY from Rs.3,435 crores to Rs. 3,890 crores

Other things to know

Here are a few interesting new bits that kept the investors and markets running on TCS 

  • TCS client base grew with additional 10 new $100 million + 21 new $50 million clients
  • TCS won a deal from South32 for mining-related IT infra management
  • TCS’ BFSI revenue is set to touch $10 billion by FY22
  • The company wins Plaza Premium deal to digitise global airport hospitality
  • La Mobiliere picks the IT giant as a strategic partner to help aid the digital transformation agenda
  • TCS bags Passport  Seva II contract worth ~Rs.6K crores
  • TCS successfully tested neural manufacturing solutions on Airtel 5G network
  • The company achieves all 18 Microsoft Gold competencies
  • The script has surged nearly 21.37% in a year though underperforming against the Nifty IT index that gained 25% in the same period

With Omicron concerns and the Government facing never-ending issues through projects with other IT giants, could this truly be TCS’s moment to shine? 

What the management says 

Samir Seksaria, Chief Financial Officer, said: “Our sustained investment in our talent has helped us power strong growth despite a challenging supply environment. We remain focused on long term talent development as well as on tactical measures to mitigate the talent churn.”

Disclaimer: The content presented here is only for educational and informational purposes. It is not intended to be advice on what to buy or sell. 

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