The country’s largest IT services provider Tata Consultancy Services (TCS) on April 16 reported a consolidated profit of Rs 8,049 crore, down 0.85 percent on a quarter-on-quarter basis due to lower other income and higher finance cost.
The novel coronavirus, or COVID-19, pandemic led lockdown has hit its earnings to some extent and reversed momentum for the company. In March, India was under lockdown for around 10 days.
“The pandemic completely reversed the positive momentum that we had started seeing in some of our biggest verticals in the first half of the quarter. On the positive side, we had very strong deal closures during the quarter. Our order book in Q4 was the largest ever from the time we started reporting the metric,” Rajesh Gopinathan, its CEO and MD, said.
Consolidated revenue for the quarter under review increased to Rs 39,946 crore from Rs 39,854 crore QoQ.
Numbers were slightly below analyst estimates. Profit was estimated at Rs 8,200 on a revenue of Rs 40,440 crore.
Dollar revenue for the quarter under review stood at $5,444 million, down 2.5 percent QoQ. Constant currency revenue growth at 3 percent was much lower compared to 6.8 percent in December quarter and 12.7 percent in Q4 FY19.
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Total contract value at the end of the March quarter stood at $8.9 billion, the largest ever in a quarter, as against $6 billion in the December quarter.
At the operating level, earnings before interest and tax rose half a percent sequentially to Rs 10,025 crore. Margin was in line with estimates, expanding 10 bps to 25.1 percent.
For FY20, profits grew by 2.76 percent to Rs 32,340 crore on a revenue of Rs 1,56,949 crore, up 7.16 percent year-on-year.
Constant currency revenue growth was 7.1 percent, while annual revenue in dollar terms crossed $22 billion, up 5.3 percent YoY.
The full year growth was led by life sciences and healthcare (up 16.8 percent YoY), Europe (up 14.6 percent YoY) and UK (up 10.4 percent YoY).
TCS added five clients in the over $100 million category (taking its total to 49), six clients in the over $50 million band (105 clients) and 25 clients in the over $20 million category (240 clients) in FY20.
EBIT in FY20 rose 3.02 percent to Rs 38,580 crore, but margin contracted to 24.58 percent against 25.57 percent in FY19.
The company added 24,179 employees during the year and 1,789 in Q4, taking its total headcount to 4,48,464 at the end of March.
TCS announced a final dividend of Rs 6 per share.
The stock fell 15.5 percent in the March quarter despite sharp depreciation in the rupee against the dollar and declined 8.77 percent in the financial year 2019-20.
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