TCS Q3 net profit down 3.6% to Rs 6,531 crore

TCS Q3 net profit down 3.6% to Rs 6,531 crore

Tata Consultancy Services (TCS), the largest IT services company in India, on Thursday  said its net profit for the third quarter ending December 31 for the fiscal 2018 fell 3.94% to Rs 6,531 crore.

The company's net profit for the same period in the last fiscal was Rs 6814 core. But on sequential basis it increased by 1.3% from Q2 ending September 30. The third quarter is  a seasonally weak quarter for all IT companies in India.  

The company has declared a dividend of Rs 7 per share.  The third interim dividend will be paid to the equity shareholders of the company on Wednesday, January 31.

The total income of the Mumbai-headquartered company during the quarter touched Rs 30,904 crore, up 2.6% from Rs 30,927 crore in the year-ago period.

Commenting on the third quarter performance, TCS CEO and MD Rajesh Gopinathan said the company  wrapped 2017 with a strong performance in the December quarter.

"As lagging parts of our portfolio turn around, and areas of softness reduce, we are well placed for stronger growth ahead," said Gopinathan.

TCS results remained in line with Street estimates as its biggest market in North Amarica continued to bleed in retail and banking sector due to the holidays across major western markets like US and Canada.

The company's revenue growth was driven by manufacturing, retail & consumer business, CMT and others. But during the 3rd quarter TCS was impacted by lower banking, financial services and insurance business.

Commenting on the result,    Angel Broking Vice President Research - IT  Sarabjit Kour Nangra said  TCS posted a 1.0% sequential growth in USD revenues to $4,787mn V/s $4,801mn expected.

"In terms of the geography, USA was key driver, with North America & Latin America registering a QoQ CC growth of 1.5% and 5.0% respectively. In Europe, it was Continental Europe registering a QoQ CC growth of 2.6%. PAT came in at Rs 6,531cr V/s Rs 6,509cr expected, up of 1.1% QoQ,"said Nangra.

TCS growth during the quarter was led by Latin America, up 5%QoQ, followed by Continental Europe, 2.6% QoQ, and North America, 1.5% QoQ. On YoY basis, Continental Europe (22.3%), UK (8.2%), and India (4.1%) performed very well. North America grew by 2.8% YoY.

The company also announced the BSE that based on the recommendations of the Nomination and Remuneration Committee it appointed Dr. Pradeep Kumar Khosla as an Additional and Independent Director with effect from January 11, 2018.

The company signed its first over $50 million deal in 'Digital' this quarter. During the quarter, the company  added  7 clients over $20 million band, 9 clients in the $10 million band and 15 clients in the $5 million band.

"New deal ramp-ups, increasing traction in Digital, robust demand pick up in Retail and continuing momentum in most of TCS' industry verticals gave the company strong volume growth in a seasonally weak quarter,"said TCS Chief Operating Officer and Executive Director N Ganapathy Subramaniam.

TCS' digital revenue saw an increase of about 40% year-on-year and accounted for 22.1%of the company's revenues.

The company added 12,534 employees during the third quarter, taking its total headcount to 3,90,880 people.  During the quarter, the company witnessed its IT attrition rate (LTM) coming down 0.2% sequentially to 11.1%.  

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