TCS Q4 net profit rises, digital business pays off

India’s largest software-services company Tata Consultancy Services (TCS) on Thursday posted a 4.57% year-on-year (yoy) rise in net profit for the recently concluded March quarter backed by strong demand for its digital services.

For the last quarter of FY18, TCS posted a net profit of Rs 6,925 crore compared with Rs 6,622 crore recorded during the same period last year. The IT firm’s revenue stood at Rs 32,075 crore, up 8.2% yoy as against Rs 29,642 crore, a year ago.

“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 managing director, TCS. During the quarter under review, TCS’s revenue from digital business grew by 42.8% year-on-year.

Over the last few years top-tier Indian IT companies have ramped up their digital services offerings in areas such as artificial intelligence (AI), analytics, mobility, the Internet of Things (IoT) and cloud computing as clients push for more transformative services than just cost-savings outsourcing deals.

For the full year TCS’s net profit stood at Rs 25,880 crore, down 1.8% over last year, while its revenue was recorded at Rs 123,104 crore, up 4.35% year-on-year.

TCS announced a final dividend of Rs 29 per equity share and its board also recommended a 1:1 bonus share issue.

“Strong deal wins and a good pipeline positions us very well in the new fiscal,” said N Ganapathy Subramaniam, chief operating officer and executive director, TCS.

The Mumbai-headquartered IT company does not provide quarterly or full year revenue or profit outlook.

In the quarter under review TCS clocked a net addition of 4,118 employees, the highest number of employees added in a quarter during the last fiscal (FY18), taking its total workforce to 3,94,998 employees. For TCS the attrition rate on a last twelve month basis (LTM) stood at 11% in Q4 in IT services.

Shares of TCS closed at Rs 3190.65 a piece, marginally up 0.99% on the Bombay Stock Exchange before the earnings announcement on Thursday. The sensitive index, Sensex, ended the day marginally up by 0.28%.