TCS clocks record $11.3-bn deals in Q4

Closing FY22 On A Strong Note

- Net profit rises 14.8% to Rs38,327cr in FY22

- TCV at $34.6 bn

- Mega deals made a comeback in March qtr

- TCS signed 2 mega deals totaling $1 bn

- Operating margin at 25.3 for FY22, 25% in Q4

Bengaluru: India's largest IT services player Tata Consultancy Services (TCS) on Monday kickstarted the fourth quarter (Q4) earnings season with a strong set of numbers as the company ended FY22 with a mid-teen rise in revenues and a strong deal pipeline.

For FY22, TCS posted a net profit of Rs38,327 crore, a rise of 14.8 per cent over the last fiscal year, while its revenues stood at Rs1,91,754 crore, a growth of 16.8 per cent over the same period of last fiscal. Revenues rose 15.4 per cent in constant currency term to $25.707 billion in FY22. The IT firm added its highest incremental revenue of $3.53 billion in the last financial year.

For the fourth quarter ended March 2022, net profit of the IT major was at Rs 9,926 crore, a rise of 7.4 per cent and its revenue was at Rs 50,591 crore, up 15.8 per cent on year-on-year basis. Revenue in Q4 was at $6.69 billion, which rose 3.2 per cent in sequential term.

"We are closing FY22 on a strong note, with mid-teen growth and adding the maximum incremental revenue ever. Increasing participation in our customers' growth and transformation journeys, and an all-time high order book provides a strong and sustainable foundation for continued growth ahead," said Rajesh Gopinathan, CEO and MD of TCS.

During the fourth quarter, TCS reported a robust deal pipeline with total contract value of $11.3 billion, which was the highest ever order book for the company in a quarter. For FY22, its TCV stood at $34.6 billion. Mega deals made a comeback in the January-March quarter as TCS signed two mega deals totaling $1 billion.

On the likely impact of the Ukraine conflict, Gopinathan said that the company doesn't see any impact of the event on its growth as technology sector will be last sector to be impacted.

In Q4, operating margin of the IT major remained steady at 25 per cent and for the whole fiscal, margin was at 25.3 per cent. The company reported a broad-based growth across verticals in the fourth quarter, raising confidence of its continuation in this financial year. While growth in retail vertical was at 22.1 per cent YoY, manufacturing vertical grew by 19 per cent. BFSI (banking, financial services &insurance) vertical reported a growth of 12.9 per cent in Q4.

However, the company continued to see rising attrition during the fourth quarter which inched up to 17.4 per cent in Q4 from 15.3 per cent in the previous quarter. On net basis, the company added 35,209 employees, the highest ever net addition in a quarter. Employee headcount stood at 592,195, a net addition of 103,546 during the year, which was at all-time high for the company.

"We see attrition plateauing in the coming quarters. As far as resuming work from office is concerned, we are looking at employees at the managerial level to attend office three days a week from this month," said N Ganapathy Subramaniam, Chief Operating Officer at TCS, adding that employees are excited to come back to offices.

The company doesn't see any impact of the Ukraine conflict on its growth as technology sector will be last sector to be impacted. An all-time high order book provides a strong and sustainable foundation for continued growth ahead

-Rajesh Gopinathan, CEO and MD of TCS