TCS Q4 net profit beats expectation marginally with 3.8pc rise

MUMBAI, INDIA: Beating analyst expectations for the first time in seven quarters, India's largest IT services company, TCS said its Q4 net profit rose to Rs 6,341 crore, up 3.8% QoQ, marginally higher compared to the estimates of Rs 6,273.4 crore. Revenues rose to 28,449 crore up 4% QoQ.

"Core portfolio performed strongly in a seasonally weak 4th quarter driven by strong volumes led by growth in BFSI, retail and manufacturing sectors. This gives us good momentum going into the new financial year. Our investments in building high impact digital platforms is paying off, resulting in over USD 2.3 billion in digital revenue," said N Chandrasekaran, CEO and MD.

In FY16 Digital revenues grew 52.2% due to faster adoption of digital solutions as customers moved to embrace a holistic digital transformation of the enterprise. TCS captured significant

customer opportunities with 15.5% of total revenues coming from Digital in Q4 led by Analytics, AI, cloud and mobility and channels.

Rajesh Gopinathan, Chief Financial Officer, TCS, said, “We have invested over $250M to support organic growth in our Digital businesses and in new markets, while maintaining our profitability within our desired range and generated strong operating cash flows as well.”

The fourth quarter saw broad-based growth with the core portfolio performing strongly led by BFSI (3.2% QoQ), Manufacturing (3.9% QoQ) and Retail (2.1% QoQ) in constant currency. For FY16, growth was led by BFS (14.8% YoY), Life Sciences (20.6% YoY), Travel & Hospitality (17% YoY) and Manufacturing (15% YoY) in constant currency.

Geography wise, growth in Q4 was led by Europe (3.6% QoQ) and North America (2.4% QoQ) in constant currency. For FY16, North America grew by 10.8%, Europe grew by 12.9%, UK by 8.3% in constant currency. India crossed $1 billion milestone in annual revenues while overall revenues from new Growth Markets stood at $3.3 billion in FY16.