Tata Consultancy Services reported a 4 per cent year-on-year decline in net profit for the October-December quarter at Rs 6,531 crore, as “patchy” growth in banking, financial services and insurance (BFSI), its largest vertical, in what is also a seasonally weak quarter, hurt.
Revenue for the third quarter was up 4 per cent from a year ago to Rs 30,904 crore, the country's largest software services exporter said on Thursday. On a quarter-on-quarter basis, TCS' net profit was up 1.3 per cent, while revenue rose 1.2 per cent.
Its volume growth (up 1.6 per cent sequentially) was the strongest for a December quarter in three years.
“On a year-on-year basis, all industry verticals—with the exception of BFSI and retail—grew above 9.5 per cent, with four verticals growing in double digits,” the Mumbai-based company said.
The company has seen a turnaround in the retail segment with the vertical reporting a 3 per cent year-on-year (6 per cent quarter-on-quarter) growth. However, BFSI revenue rose just 0.2 per cent from a year ago (down 1.5 per cent sequentially).
Rajesh Gopinathan, MD and CEO of TCS, said, growth in the BFSI vertical had been “patchy” and feels a meaningful recovery was still a “couple of quarters” away.
TCS has signed several large deals last quarter. Some of them included a deal to provide IoT (internet of things) digital platform capability for Rolls Royce, selected as principal technology partner by UK retailer Marks & Spencer and extended partnership with market research firm Nielsen till 2025.
The company also continues to see strong growth in Digital. In the third quarter, Digital revenues rose 40 per cent year-on-year (14 per cent sequentially) and now contribute to around 22 per cent of TCS' revenues, up from 19.7 per cent in the quarter-ended September.
“As lagging parts of our portfolio turn around, and areas of softness reduce, we are well placed for stronger growth ahead,” added Gopinathan.
TCS' total attrition rate declined to 11.9 per cent (11.1 per cent in IT services). It added 1,667 employees on a net basis and had 390,880 employees on a consolidated basis at the end of December.
TCS shares closed down 0.7 per cent at 2,788.40 on Thursday. The results were announced after markets closed.
