Strong growth across key geographies and continued momentum in digital technologies drove Tata Consultancy Services' fourth quarter consolidated net profit up 4.5 per cent at Rs 6,904 crore, from Rs 6,608 a year ago.
The country's largest software services exporter reported a revenue growth of 8 per cent year-on-year in the January-March quarter at Rs 32,075 crore.
“Strong demand in digital across all industry verticals and large transformational deal wins have made this one of our best fourth quarters in recent years. The strong exit allows us to start the new fiscal on a confident note,” said Rajesh Gopinathan, CEO and MD of TCS.
Operating margins in the fourth quarter stood at 25.4 per cent, versus 25.7 per cent in the year ago quarter.
In recent years, TCS has been investing heavily behind new technologies including analytics, automation, cloud services, cyber security and internet of things.
In the fourth quarter, digital revenue rose 43 per cent year-on-year and accounted for 23.8 per cent of its total revenues and the company sees that momentum continuing on the back of greater adoption of digital technologies by customers.
“It is a question of having multiple services, but not just having multiple services. The ability to stitch together and provide holistic solutions to the customer, which is allowing us to create these large deals, where the demand uptick is coming from,” said Gopinathan.
From a geographical perspective, the overall growth was led by Continental Europe, where revenue grew 19.1 per cent, UK revenues were up 10.7 per cent, while in Asia Pacific and North America growth was 8.6 per cent and 4.9 per cent respectively.
At the end of March, the company had 394,998 employees. For the year ahead, the company has given offers to 20,000 trainees, and it will continue with just-in-time hiring, based on requirements.
TCS has given average 2-6 per cent wage hikes for 2018-19, effective April 1. Employees were also given 120 per cent of their quarterly variable bonus payout in the fourth quarter.
Overall, markets analysts seem upbeat on the road ahead for TCS, based on its fourth quarter earnings.
“Post Q4 performance, we are encouraged by renewed traction in TCS’ business. Apart from BFSI (banking, financial services and insurance vertical) and retail, other verticals achieved either in-line with or better than company average growth,” said Harit Shah an analyst at Reliance Securities.
The TCS board also approved a bonus issue of equity shares in the ratio of one share for every one share held, which should also cheer investors.
TCS shares ended up 1 per cent at Rs 3,190.65 on the BSE on Thursday. The earnings were announced after markets closed.