TCS Revenue Rises 4.9% in December Quarter Despite Profit Decline
TCS Q3 Results Update: The country's largest IT company's net profit has declined by 13.91%. The company's headcount has also declined by 11,151 employees. Find out what the Tata Group company's CEO said about revenue and AI growth.
Tata Consultancy Services (TCS), being the largest IT company in the country, has declared results for the third quarter, or December quarter, of the current financial year on Monday. The overall performance of the company has proved to be a mixed bag. Although there has been a slippage in the net profit and a reduction in the number of employees, growth in revenue and AI segment is a pleasant surprise for the company.
According to data released by TCS, the company's net profit declined by 13.91 percent to ₹10,657 crore in the December quarter. In the same quarter (October-December) of the previous fiscal year, the company had earned a profit of ₹12,380 crore. This year, the profit also declined compared to ₹12,075 crore in the previous quarter, i.e., the September quarter.
However, in terms of growth in the top line, or revenue, the company did quite well. Revenue from operations grew by 4.86% to ₹67,087 crore in the reporting period from ₹63,973 crore in the comparable period in the previous year.
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Despite the decline in profits, the company has managed to maintain its operational efficiency. According to a company statement, the operating profit margin remained stable at 25.2 percent in the third quarter, the same as the September quarter. Importantly, this is higher than the 24.5 percent margin in the same quarter last year.
The company has made significant strides in new-age technology, especially in the field of artificial intelligence (AI). TCS Chief Executive Officer (CEO) and Managing Director K. Krithivasan stated that annual revenue from AI grew by more than 17 percent to $1.8 billion. He also stated that the growth seen in the September quarter continued in the next three months. The company's performance in terms of new deals has been strong. Total contract value (TCV) in the December quarter was $9.3 billion.
Investors were positive on TCS shares in the stock market on the day of the results announcement. On Monday, TCS shares closed at ₹3,235.70, up 0.86 percent on the BSE. These TCS results paint a mixed picture for India's information technology sector. While a 14% decline in profits and a reduction in headcount indicate global economic uncertainties, the increase in revenue from artificial intelligence and stable margins suggest the company is future-ready through new technologies.
