TCS Reports Strong Q3 Numbers – Net Income at ₹12,380 crore – Growth led by Consumer Business Group and Regional Markets

TCS have reported strong Quarterly Results

It reported a revenue at ₹63,973 crore | Growth of 5.6% YoY, +4.5% in CC. Growth is led by Consumer Business Group (+1.1%), Energy, Resources and Utilities (+3.4%) and Regional Markets (+40.9%)

Growth Markets continue to lead. This includes India (+70.2%), Middle East & Africa (+15%), Latin America (+7%), Asia Pacific (+5.8%)

Key Performance Highlights Include:

• Operating Margin at 24.5%; Net Margin at 19.4%
• Strong TCV at US$10.2 Billion, Book to Bill ratio of 1.4
• Operating Margin at 24.5%; a decline of 50 bps YoY*, sequential improvement of 40 bps
• Net Income at ₹12,380 crore, +5.5% YoY | Net Margin at 19.4%
• Net Cash from Operations at ₹13,032 crore i.e. 105.3% of Net Income
• Workforce strength: 607,354 | LTM IT Services attrition rate at 13.0%
• Diverse and inclusive workplace: Women in the workforce: 35.3% |152 Nationalities

TCS has declared a Dividend of ₹ 76 per share, including ₹ 66. as special dividend

Company commented that with increased regulatory scrutiny and legislative action, responsible AI adoption is top of mind for its clients. Company has launched an innovative offering, TCS 5A Framework for Responsible AI with its partner AWS. This is the first of its kind for the industry and will help and identify and mitigate AI risks holistically.

Gen AI/AI and Cloud services continued to see significant growth for us this quarter. Clients are investing in Agentic AI adoption, building robust data foundation and taking a value chain-based approach to AI and Gen AI led transformation. We actively engaged with clients on AI/Gen AI led software engineering, legacy modernization and AI.Ops. We saw an increase in successful production deployment of AI/Gen AI engagements leading to greater business certainty and confidence for our clients. Cloud services continued to see good traction in legacy Modernization, Data Platform Modernization and Technology Landscape Simplification.

Cyber Security services and solutions saw strong growth. Growth was led by Technology, Software and Services and BFSI industry units. Clients continued to focus on Identity and Access Management, Governance, Risk & Compliance (GRC), Managed Detection & Response (MDR) and Cloud Security. We are also seeing good traction in Secure Gen AI and vulnerability management.

TCS interactive services saw good traction this quarter. BFSI and CBG led growth in industry segments. Businesses and marketers are investing in personalization, data harmonization, marketing operations, and orchestrate the appropriate technology and data foundations. To capitalize on these opportunities, we continue to invest in creative design, content services, leading technology partnerships, Gen AI solutions, and niche talent development to remain future-ready and relevant.

Company partnered with Landis+Gyr to integrate our award-winning enterprise-level energy and emission management system TCS Clever EnergyTM with their advanced smart metering and grid management technologies, creating a comprehensive energy management solution for utilities. The partnership will enable utilities to meet the complex energy demands of their commercial and industrial clients while offering them advanced tools to optimize energy usage and achieve sustainability targets. TCS extended partnership with Telenor Denmark (TnDK), the second largest mobile operator in the Danish market, to provide ITIS managed services, handling TnDK’s IT infrastructure from its delivery centre in Europe over the next five years, to deliver significant operational cost reductions and improved IT infrastructure.

TCS is selected by Bank of Bhutan to modernize the bank’s digital core for enhanced customer service. TCS will implement its TCS BaNCS™ Global Banking Platform to help the bank optimize operations and seamlessly integrate with the various public services within the digital ecosystem of the country.

TCS signed a multi-year deal to help Air France-KLM, to become the most data-centric airline group in the world. TCS will modernize the airline group’s data by moving it to cloud and this shift will help Air France-KLM exit data centers and harness the strength of the cloud, supporting a sustainable and adaptive aviation industry. The new data architecture will enable the use of data to enhance operations, drive decisions, improve functionality, and gain efficiency.

Speaking on the performance, Mr K Krithivasan, Chief Executive Officer and Managing Director, said: “We are pleased with the excellent TCV performance in Q3 which was well-rounded across industries, geographies and service lines lending good visibility to long-term growth. BFSI and CBG returning to growth, continued stellar run of Regional Markets and early signs of revival in discretionary spend in some verticals give us confidence for the future. Our continuing investments in upskilling, AI/Gen AI Innovations and partnerships sets us up to capture the promising opportunities ahead.”

Mr Samir Seksaria, Chief Financial Officer, said: “In a quarter that saw significant cross-currency volatility, TCS’s strong execution, cost management and deft currency risk management helped deliver healthy margin improvement and free cash flows. Disciplined investments in talent and infrastructure should lend good support to long-term business growth.”

Galactik Views

Related articles