At TCS, the protracted period of subpar growth continued as India’s biggest technology outsourcing firm posted a 0.3 per cent dollar revenue growth, marginally higher than Dalal Street expectations, in the October-December period. The company, which ended with 16.5 billion dollars in revenue last year, has grown more than 3 per cent on a sequential basis in a quarter only 3 times since October 2014. Worryingly, over these past 9 quarters, it last reported an over 10 per cent year-on-year (YoY) growth only once, in the January-March 2015 period.
TCS saw a 0.3 per cent rise in dollar revenue from the preceding 3 months, and was up 5.8 per cent from the year-ago period to 4.379 billion dollars in the quarter to December. In rupee terms, third-quarter (Q3) revenue rose 1.5 per cent to Rs 29,735 cr from the preceding 3 months. In constant currency terms, TCS posted a 2 per cent growth, on account of generating more business from its banking clients in the United States.
The company’s quarterly profit rose 1.6 per cent sequentially to 1 billion dollars, up 8 per cent from 926 million dollars in the year-ago period. Meanwhile, TCS share price closed 4 per cent lower on the NSE on 13th January, 2017.
Analysts had estimated the firm to report Rs 6,432 cr (947.49 million dollars) profit on net sales of 29610.5 cr (4.36 billion dollars).
The company’s operating margin was 26 per cent, similar to what it was at the end of the July-September period.
TCS has added 786 million dollars in incremental revenue from April to December this year against 783 million dollars in novel business in the first 9 months of 2015-16. Significantly, for the first time since TCS went public in 2004, its annual growth will be less than or at best on par with Accenture, which is double the size of the Mumbai based firm.
Its revenue from banking, financial services and insurance firms, which accounts for 40 per cent of total revenue, reported a 2.1 per cent increase in constant currency terms. TCS posted a 2.2 per cent improvement in the US, which accounts for 55 per cent of total revenue. Revenue growth in the United Kingdom, which brings about 13.3 per cent of total business, rose 1.7 per cent, while the India business, which brings about 6.3 per cent of revenue, jumped 10.3 per cent.
TCS managed to retain more employees in Q3, as attrition for IT services stood at 11.3 per cent and encompassing back office unit (BPO business), attrition was 12.2 per cent.
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