TCS Q3 Earnings Explained In 10 Points; From Deal Wins, Rs 27/Share Dividend To Campus Hiring, AI Cloud

Tata Consultancy Services (TCS) has surprised experts with its resilience in Q3FY24. The company exceeded estimates on all fronts, indicating its strong fundamentals despite the challenging environment in the near term. TCS said on Thursday said, sustained cloud demand and operational excellence marks its Q3.

Here are 10 key points to sum up TCS Q3 earnings:

1. TCS logged a consolidated net profit of Rs 11,058 crore in Q3FY24, registering a growth of 1.95% year-on-year but a decline of 2.5% quarter-on-quarter. Consolidated revenue was at Rs 60,583 crore, which rose by 4.04% YoY and 1.49% QoQ. In constant currency, TCS revenue growth was at 4% YoY. While EBIT margin expanded by 50 bps to 25% in the quarter.

2. TCS recorded a decline in both attrition and headcount. TCS let go of 5,680 employees sequentially, taking its total headcount to 603,305 employees as of December 31, 2023. The company's IT services' attrition declined further to 13.3% for the last twelve months.

3. Milind Lakkad, Chief HR Officer of TCS said that TCS is committed to hiring from college campuses and growing talent organically. He added, "We have commenced our campus hiring process for the next year and see tremendous excitement among freshers to join TCS."

4. TCS's order book stood at $8.1 billion, while its book-to-bill ratio came in at 1:1. Further,

5. AI Push! TCS said, AI.Cloud led the demand among Service Lines with strong momentum sustaining Cloud migrations and increasing interest among customers for AI and Generative AI.

6. The India market drives earnings! As per the financial results, among major markets, the United Kingdom led with 8.1% growth; Continental Europe grew 0.5% and North America grew -3.0%. In emerging markets, India led with 23.4% growth, Middle East & Africa grew 16.0%, Latin America grew 13.2%, and Asia Pacific grew 3.9%.

7. BFSI and CMT continue to be a sore sight, but Energy, Resources and Utilities keep revenue steady. TCS highlighted that growth was led by the Energy, Resources and Utilities vertical which grew 11.8%, Manufacturing which grew 7.0% and Life Sciences and Healthcare which grew 3.1%. The Consumer Business Group (CBG)
grew -0.3%, BFSI grew -3.0%, Communications & Media grew -4.9% and Technology & Services grew -5.0%.
Regional Markets grew 19.2%.

8. The Tata Group-backed flagship company not only announced a third interim dividend of Rs 9 per share for investors for FY24 but also declared a special dividend of Rs 18 per share. Together, TCS is set to reward shareholders with a hefty dividend of Rs 27 per share.

9. Services segment healthy! Clients continue to prioritize investments that accelerate cost reduction, drive business agility and improve resiliency across the supply chain. TCS is helping clients realize business benefits with its significant investments in talent development, proprietary solutions and expanding alliances and partnerships. AI.Cloud, Cyber Security and Cognitive Business Operations led the growth among service lines.

10. In 9MFY24, TCS registered 8.03% growth in consolidated revenue to Rs 1,79,656 crore, as against Rs 1,66,296 crore of 9MFY23. Consolidated net profit climbed by 8.84% to Rs 33,474 crore in 9MFY24 versus Rs 30,755 crore in 9MFY23.