TCS Q3 net rises 11% on cloud business, forex gains

Revenue expands 19.1% while operating margin narrows; headcount dips by 2,100 even as attrition edges lower

Tata Consultency Services Ltd. (TCS) reported third quarter net profit surged 11% year-on-year (yoy) to ₹10,846 crore, on the back of strong performance in its cloud busines, market share gain and currency support.

Revenue grew 19.1% to ₹58,229 crore. In constant currency, revenue expanded 13.5%. Operating margin narrowed 50 basis points to 24.5%.

The board announced a dividend of ₹75 per share including special dividend of ₹67 per share. The record date is January 17 and payment would be made on February 3..

Significantly, net headcount declined by 2,197 from the previous quarter. At the end of December, the company had a workforce totalling 6,13,974. Attrition dropped to 21.3% from 21.5%, after six quarters of uptick.

“We are pleased with our strong growth in a seasonally weak quarter, driven by cloud services, market share gains through vendor consolidation, and continued momentum in North America and U.K.,” said Rajesh Gopinathan, chief executive officer and managing director.

Asked about the dip in numbers, the company said it had focussed on productivity enhancement. “Our focus over the last few quarters on bringing in fresh talent at scale, training them on new technologies and making them productive is paying off,” said Milind Lakkad, Chief HR Officer.

“The sustained strength of demand for our services is a validation of the value we provide to our clients in helping them differentiate themselves, while enhancing their competitiveness. Looking ahead, and beyond current uncertainties, our longer-term growth outlook remains robust,” he added.