TCS Q3 Results: Net Profit Rises 12% to ₹12,380 Crore; ₹66 Special Dividend Declared

Tata Consultancy Services (TCS), a leading IT services company, announced its Q3 FY25 results on January 9, reporting a 12% rise in consolidated net profit to ₹12,380 crore, compared to ₹11,058 crore in the same quarter last year. The net profit surpassed market estimates, reflecting TCS's resilience in a challenging global economic environment.

Revenue Performance

TCS’s consolidated revenue grew by 6% YoY, reaching ₹63,973 crore, up from ₹60,583 crore in Q3 FY24. However, this fell short of the anticipated ₹64,218 crore, as forecasted by a Moneycontrol poll of seven brokerages. On a sequential basis, net profit rose by 4%.

Dividend Announcement

The board of TCS declared a third interim dividend of ₹10 per equity share and a special dividend of ₹66 per share, rewarding its shareholders. The record date for the dividend is January 17, and payments are scheduled for February 3.

Order Book and Business Outlook

TCS achieved a total order book of $10.2 billion, a significant 26% YoY growth, marking the highest in the past five fiscal years. This strong order book reflects the company’s robust pipeline across industries, geographies, and service lines, providing good visibility for future growth.

K. Krithivasan, CEO and MD, stated:

“We are pleased with the excellent TCV performance in Q3, which was well-rounded across industries and geographies. Early signs of revival in discretionary spending give us confidence in capturing the promising opportunities ahead.”

Employee Growth and Investments

TCS continued its focus on employee upskilling and well-being, promoting over 25,000 employees during the quarter, bringing the total number of promotions this financial year to over 110,000. Campus hiring remains on track, with plans to onboard more graduates in the coming year.

Milind Lakkad, Chief HR Officer, highlighted:

“Our investments in talent and infrastructure will play a pivotal role in sustaining long-term business growth.”

Operating Margin Improvement

The operating margin stood at 24.5%, a sequential improvement of 40 basis points, driven by effective cost management and favourable currency movements. Samir Seksaria, CFO, noted:

“Despite cross-currency volatility, disciplined investments and risk management enabled margin improvement and healthy free cash flows.”

Market Reaction

TCS shares on the BSE closed at ₹4,046, down 1.5% ahead of the results announcement.

Analyst Insights

Analysts pointed out that while revenue growth was below expectations due to seasonal client slowdowns during the holiday period, strong deal wins and improved operating margins were positive signs.

Piyush Pandey of Centrum Broking commented:

“The deal wins and margin improvements indicate potential recovery in the U.S. market in the coming quarters.”

Peers to Report Next Week

As the first major Indian IT firm to report Q3 results this earnings season, TCS sets the tone for its peers, including Infosys, Wipro, and HCLTech, which are scheduled to announce their results next week.

Key Takeaways

• Net Profit: ₹12,380 crore, up 12% YoY
• Revenue: ₹63,973 crore, up 6% YoY
• Order Book: $10.2 billion, highest in five fiscal years
• Dividends: ₹10 interim and ₹66 special dividend declared
• Operating Margin: Improved to 24.5%

TCS’s focus on innovation, upskilling, and operational efficiency positions the company for sustainable growth, despite global headwinds. The robust order book and strategic investments highlight its commitment to long-term value creation.