TCS on Monday reported a strong set of numbers for the March quarter announcing order wins worth a stupendous $9.2 billion. Revenues in constant currency terms rose 4.2% sequentially to Rs 43,705 crore while margins expanded by 20 basis points to 26.8%, despite wage hikes. The software services major reported an ebit of Rs 11,734 crore ebit while net profits came in at Rs 9,246 crore, slightly lower than estimates. Free cash flows at the end of March stood at Rs 37,968 crore.
Managing director and chief executive officer Rajesh Gopinathan said the company was well-positioned to exploit the multi-year tech services opportunity even as it continued to dominate traditional areas and was gaining share in the growth and transformation opportunity. “We are engaging upstream with customers as they think of their transformation agenda. From a delivery perspective we are re-configuring the service mixes,” Gopinathan said.
TCS’ record quarterly order win—versus an average of $6-7 billion—takes the annual tally to a shade under $32 billion and is an indication of how revenues could grow in the coming years. Not surprisingly, the company added a net 19,400 people the highest-ever hiring numbers in a quarter and, again, sign of how it forsees business growth in the years ahead. The total headcount at the end of March was 4,88,649. Milind Lakkad, chief HR officer said the company relied on both internal and external talent to run the business and did not forsee any supply challenges on this score.TCS ended FY21 with a net attrition of 7.2% all-time low.
All verticals showed good sequential growth, but a couple continue to lag; – BFSI was up 7% quarter-on-quarter, retail and CPG grew 4%, life sciences and healthcare was up 3.8%, manufacturing registered a 3.9% growth, technology & services grew 2.8% sequentially and communications and media by 1.8%. On a full year basis, life sciences and healthcare, BFSI and technology and services showed growth while the rest continue to be below prior year levels.
Growth was led by major markets – Continental Europe at 8.5% growth, North America 3.9% and UK 3.4% sequentially. Other markets grew well with Middle East & Africa at 4.2%, India 2.8%, Latin America up 2.5% and Asia Pacific at 1%. On a full year basis, with the exception of Continental Europe which grew 5.5%, all other markets continue to be in negative territory compared to the prior year.
V Ramakrishnan, chief financial officer, TCS, said, “Our Q4 margins are a validation of our strong belief that it is possible to win mega-deals, post industry-leading growth, continue to invest in our people and in newer capabilities, and still deliver industry-leading profitability. All the investments that we have been making over the years position us strongly to expand our footprint in the large growth and transformation opportunity”.