TCS Q4 result: Profit up 7.4% to ₹9,926 cr, revenue crosses ₹50,000 cr

The earnings season has kicked off with IT bellwether Tata Consultancy Services (TCS) Ltd declaring its financial results for the fourth quarter of the financial year 2021-22 today. TCS has ended the financial year with a record ₹9,926 crore net profit and ₹50,591 crore revenue, thanks to ramping up of deals in BFSI (banking, financial services and insurance), healthcare and retail, and acceleration in digital technologies. The net profit recorded a 7.4% rise on a year-on-year basis, while the revenue rose 15.8% YoY.

For the full fiscal year, TCS' operating margin rose 25.3%, while its net income grew 14.8% YoY to ₹38,327 crore. The revenue for the full fiscal year stood at ₹191,754 crore, up 16.8%. TCS also recorded the highest ever order book of $11.3 billion in Q4, and it was $34.6 billion for the full fiscal year.

Rajesh Gopinathan, CEO and MD of TCS said the IT major is closing FY 22 on a "strong note", with mid-teen growth and adding the maximum "incremental revenue ever".

The TCS board has also recommended a final dividend of ₹22 per equity share of ₹l each of the company, which will be paid or dispatched on the fourth day from the conclusion of the 27th Annual General Meeting, subject to the shareholders' approval, the company said.

Q4 FY 2022 highlights:

Operating margin: 25%

Net margin: 19.6%

Net profit: ₹9,926 crore, +7.4% YoY

Revenue: ₹50,591 crore, up 15.8% YoY

Strong cash conversion: Operating cash flow at 111.3% of net income

Net addition: 35,209 employees, highest ever in a quarter

Dividend per share (proposed): ₹22

TCS added 10 clients in the $100 million+ category, while 19 in the $15 million+ bucket, 40 in the $20 million+ bucket and 52 in the $10 million bucket. Record 103,546 new employees joined TCS in the full fiscal year, raising the headcount to 5.92 lakh. In Q4, TCS added 35,209 employees on a net basis, the highest ever net addition in a quarter. The attrition at the company also stood at 17.4%.

Industry-wise growth was led by Retail and CPG at 22.1%, followed by manufacturing at 19% and communications and Media at 18.7%. Technology and services grew at 18% and life sciences and healthcare grew at 16.4%. BFSI saw a growth of 12.9%.

North America remains the top market for TCS at 18.7% growth in Q4 FY22, followed by the UK and Continental Europe at 13% and 10.1% growth, respectively.

Before the financial results were announced, analysts had forecast TCS’ revenue to hit the ₹50,000 crore mark, while profit was seen surging to over ₹10,000 crore.

During the same period last financial year, TCS had recorded a net profit of ₹ 9,246 crore and its revenue stood at ₹43,705 crore. The Tata group company's net profit during the previous quarter of the financial year was ₹9,769 crore while revenue had touched the ₹48,885 crore mark.

TCS shares closed 0.26% or ₹9.55 to ₹3,696.40 from the previous session close of ₹3,868.85 on the National Stock Exchange (NSE). The share touched the day range of ₹3,656.85-₹3,711.25. The current market cap of TCS stands at ₹13,5 lakh crore.