TCS Q3 continued growth momentum. Aims for double-digit growth in FY22. Attrition rate dips to a new all-time low
Tata Consultancy Services (TCS), the leading global IT services, consulting, and business solutions organization, reported its consolidated financial results according to Ind AS and IFRS, for the quarter ending December 31, 2020.
Highlights of the Q3 Results Ended December 31, 2020
- Revenue at $5.702 Bn, +5.1% QoQ, +2.1% YoY
- Constant Currency Revenue growth: +4.1% QoQ, +0.4% YoY
- Net Income at $1.18 Bn, +3.4% QoQ, +3.7% YoY
- Operating Margin at 26.6%; Net Margin at 20.7%
- Strong Cash Conversion: Net Cash from Operations at $1.62 Bn | 137.4% of Net Profit
- Consolidated headcount: 469,261 | Net addition: 15,721 | Women in the workforce: 36.4%
- 366K+ employees trained in new technologies; 444K+ on Agile methods
- IT Services attrition rate dips to a new all-time low, at 7.6% LTM
- Interim Dividend per share: `6.00 | Record date 16/01/2021 | Payment date 03/02/2021
Commenting on the Q3 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: “Growing demand for core transformation services and strong revenue conversion from earlier deals have driven a powerful momentum that helped us overcome seasonal headwinds and post one of our best performances in a December quarter. We are entering the new year on an optimistic note, our market position stronger than ever before, and our confidence reinforced by the continued strength in our order book and deal pipeline.”
He added, “Looking beyond the immediate business growth opportunity, we are tremendously excited by what lies ahead. Cloud is enabling a new class of boundaryless organizations, that can seamlessly partner and collaborate within larger ecosystems to create innovative purpose-driven offerings to customers. This boundaryless value creation, supported by the seamless fabric of technology enabled by cloud together the seamless fabric of talent enabled by our SBWS™, will redefine industry after industry over the longer term. Our intimate knowledge of our customers’ business contexts, our strong relationships across ecosystems, and our continued investments in research and innovation make us their preferred partner in their growth and transformation journeys.”
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said, “Our Q3 growth is a very satisfactory outcome of our ability to leverage the proactive investments made to capture the strong demand and be meaningful to our clients. It is a strong endorsement of our resilience, way of working and the relative competitiveness of our products and services. We celebrated the accomplishment of our Enterprise Agile by 2020 vision during the quarter, and with SBWS™, we have a well-oiled location-independent execution model that brings in the resources just in time, efficient execution, and machine-led delivery governance that are delighting our customers. All these augur well to progress our 25×25 future of work vision.”
He added,”We have had healthy deal closures and the growth has been broad based on a sequential basis, setting ourselves well for the future. We also welcome to the TCS fold, the professionals from Pramerica and Postbank Systems, accelerating our growth plans in Ireland, Germany and more broadly in Europe.”
V Ramakrishnan, Chief Financial Officer, said, “Strong growth across all our verticals, and operational benefits from our SBWS model allowed us to post the highest operating margin in the last five years, even after rolling out a salary increase this quarter. We also had an all-time high cash conversion in Q3. This and our strong balance sheet position us very strongly to seize the opportunities that the current market offers, and more closely partner our customers in their growth and transformation journeys.”
