Tata Consultancy Services (TCS), India's largest IT services export provider, earned a net profit of INR 12,434 crore in Q4 FY24. The company witnessed a 9% rise from INR 11,392 crore during the same period the previous year. Internal efficiencies led to the rise despite revenue growing by a flat 3.5%. The company earned revenues worth INR 61,237 crore as opposed to INR 59,163 crore a year before.
The IT services behemoth will likely witness a glorious time ahead. It booked a total contract value (TCV) worth $13.2 billion during Q4 FY24. TCV shows the contracts the company will likely get in the future. However, there's no guarantee that all of this will result in revenue for the company.
TCS CEO K Krithivasan while talking about the company's performance expressed pleasure over closing Q4 and FY24 with the highest-ever order book, translating into a significant 26% operating margin. It only showcases the strength of TCS' business model and execution capability.
In view of the uncertain business environment, the IT major expects an uptick in demand during the second half of FY 24-25, Krithivasan remarked.
TCS’ revenue for FY24 was INR 2,40,893 crore, while its net profit swelled 10.5% to INR 46,585 crore during this period.
BFSI, the largest business vertical of TCS with a 33% contribution to its revenue, was at the receiving end of the tough macroeconomic environment. However, energy, utilities, healthcare, resources and manufacturing verticals posted higher growth.
While the North American segment of the company plunged by 2.3% for the fourth quarter of FY24, the India and UK segment surged by 37.9% and 15.7%, respectively.
The best part about Q4 FY24 was the 26% improvement in margins for TCS. TCS CFO Samir Seksaria has said that the company's disciplined operational approach helped it expand its industry-leading margins.
He further revealed that the company continued to invest in workforce reskilling, research and innovation amid a challenging environment. Samir emphasised the company's vision to continue driving efficiencies and competitive strength to unlock profit-oriented growth opportunities.
Amid a 9% rise in net profit during Q4 FY24, TCS declared a 5% wage hike for employees and a double-digit jump for high performers. The company's headcount was 6,01,546 as of March 31, 2024. The headcount was reduced by 13249 over a year.
YFS Sounds Optimistic About TCS
Registering a rise in net profit despite weak market sentiments showcases the strength of TCS, its business model, workforce and vision. Your First Startup (YFS) reckons the IT major will continue to set benchmarks for others to follow.