TCS registers 9% net profit rise in Q4 FY24; announces salary increase
TCS remained positive about its future outlook as it closed Q4 with a total contract value (TCV) of $13.2 billion. TCV is a measure of the potential contracts in the pipeline and does not necessarily mean that all this will translate into revenue.
Tata Consultancy Services (TCS), India’s largest IT services exporter, reported a 9% annual rise in net profit for the fourth quarter (Q4) of FY23-24, aided by internal efficiencies even as revenue grew 3.5%.
Net profit in Q4 FY24 stood at Rs 12,434 crore compared with Rs 11,392 crore earned in the same period last year. It registered Rs 61,237 crore in revenue compared with Rs 59,162 crore a year ago.
The company remained positive about its future outlook as it closed Q4 with a total contract value (TCV) of $13.2 billion. TCV is a measure of the potential contracts in the pipeline and does not necessarily mean that all this will translate into revenue.
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On the performance of the company, TCS CEO K Krithivasan said, “We are very pleased to close Q4 and FY24 on a strong note with the highest ever order book and a 26% operating margin, validating the robustness of our business model and execution excellence.”
He remarked that given the uncertain business environment, the IT major expects a pickup in demand in the second half of the current fiscal year.
For the full FY24, TCS reported a revenue of Rs 240,893 crore, a growth of 6.8%. Its net profit stood at Rs 46,585 crore, an increase of 10.5%.
The tough macroeconomic environment also negatively affected TCS' largest business vertical, BFSI, which contributes around 33% of its revenue. Energy, resources, utilities, manufacturing, and healthcare verticals recorded higher growth.
In terms of markets, the North American segment declined by 2.3% for the quarter, while the bright spots were the UK and India, which grew by 15.7% and 37.9%, respectively.
One positive element during Q4 FY24 was the improvement in margins at 26%, a 1.5% annual rise.
TCS CFO Samir Seksaria said, “In FY 2024, our disciplined approach to operations has helped us expand our industry-leading margins. In a challenging environment, we persisted with our long-term investments in workforce reskilling, research, and innovation. We will continue to drive efficiencies and competitiveness to capture opportunities for growth with profitability.”
TCS also announced a wage hike for its employees in the range of 5% and a double-digit increase for high performers. The headcount of the IT company stood at 601,546 at the end of March 31, 2024, a reduction of 13,249 employees in one year.
Edited by Suman Singh