TCS Reports 7% Jump In Q3 Profit; Announces Interim Dividend

On Friday, Tata Consultancy Services reported a consolidated net profit of Rs 8,701 crore for the December-ended quarter, a 3.2% jump from the previous quarter and a 7.3% increase year-on-year, on the back of demand-led revenue growth.

The IT giant said that it was the strongest third-quarter growth in the last nine years.

TCS also informed that its board has approved a third interim dividend of Rs 6 per share, which shall be paid on 3 February to equity shareholders of the company.

Notably, the September-ended quarter has a post-tax one-time impact of Rs 958 crore due to provision for ongoing litigation with EPIC.

The consolidated revenue for the quarter rose 4.7% sequentially to Rs 42,015 crore, and the year-on-year increase was 5.4% for the quarter. In constant currency terms, revenue growth was 4.1% quarter-on-quarter and 0.4% year-on-year.

Operating margin for the quarter under review was at 26.6% while net margin was at 20.7%.

TCS also reported a strong cash conversion during the quarter wherein net cash from operations was at Rs 11,952 crore, 137.4% of net profit.

During the December-ended quarter, Tata Consultancy Services Netherlands BV, a wholly-owned subsidiary of the Company, as a part of an overall arrangement, signed a definitive agreement on 1 January 2021, to obtain an entire equity stake in Postbank Systems AG (PBS), a subsidiary of Deutsche Bank AG, at an agreed consideration.

TCS incorporated a wholly-owned subsidiary, Tata Consultancy Services Ireland Limited in Ireland on
2 December 2020 and liquidated CMC Americas Inc. on 16 December 2020.

The company also sold its equity stake in Technology Outsourcing S.A.C., a wholly-owned step-down subsidiary at Peru, on 1 December 2020.