TCS Q3 Results Net Profit Rises 12% to Rs 12,380 Crore, Revenue Misses Estimates {update}

On a sequential basis, TCS reported a 4% rise in net profit, maintaining steady growth amid challenging market conditions. The company’s shares closed at Rs 4,046 on the BSE, down by 1.5% before the results were announced.

Dividends Announced: Special and Interim

TCS declared two dividends for its shareholders. A third interim dividend of Rs 10 per share and a special dividend of Rs 66 per share were announced. The record date for these dividends is set for January 17, 2025, with the payment scheduled for February 3, 2025.

Key Highlights from the Earnings Report

• Order Book Growth: TCS recorded its highest-ever order book for a single quarter at $10.2 billion, marking a 26% year-on-year growth. This is a significant jump compared to $8.6 billion in the previous quarter and $8.1 billion in the same period last year.
• Operating Margin: The operating margin improved to 24.5%, a sequential increase of 40 basis points, supported by effective cost and currency risk management.
• Employee Promotions and Hiring: Over 25,000 employees were promoted in Q3, bringing the total number of promotions for the fiscal year to more than 110,000. The company also confirmed that its campus hiring plans are on track and preparations are being made to onboard even more fresh talent next year.

Leadership Commentary

K Krithivasan, CEO and Managing Director of TCS, expressed optimism about the future. He highlighted strong performance across industries, geographies, and service lines. Krithivasan noted signs of revival in discretionary spending in some verticals and emphasized the company’s focus on AI innovations and partnerships to capture growth opportunities.

Samir Seksaria, Chief Financial Officer, praised the company’s cost management efforts and currency risk strategies for delivering improved margins and strong cash flows.

Analyst Insights

Piyush Pandey, an analyst at Centrum Broking, noted that revenue growth was below expectations due to the seasonally weak third quarter, with many clients reducing operations during the holiday season. However, he described the company’s deal wins and margin improvements as “positive signs” that could lead to better performance in the coming quarters, especially in the US market.

Sector Context

TCS is the first among major Indian IT firms to release its Q3 earnings for the current financial year. Other companies like Infosys, Wipro, and HCLTech are expected to announce their results in the coming week.

The IT sector has been facing challenges due to cross-currency volatility and changing client budgets. Despite these hurdles, TCS continues to demonstrate resilience through strategic investments in talent, infrastructure, and cutting-edge technology.

For more updates on the stock market and IT sector, stay tuned.