Tata Consultancy Services (TCS), the country’s largest IT services firm, on Thursday missed estimates on both revenue and profit fronts, underlining continued caution among global clients amidst a challenging macroeconomic environment.
The company’s consolidated net profit rose 4% sequentially to Rs 12,380 crore, missing Bloomberg’s estimate of Rs 12,534 crore. Revenue declined by 0.4% sequentially to Rs 63,973 crore, falling short of the estimate of Rs 64,748 crore.
Operating margins stood at 26.6% against 26% in the second quarter, driven by cost management and favourable currency movements. Total contract value (TCV) of new deals came in strong at $10.2 billion, a significant jump from $8.6 billion in Q2FY25.
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TCS announced a third interim dividend of Rs 10 per share and a special dividend of Rs 66 per share, with a record date of January 17 and payment date set for February 3.
The decline in revenue was largely attributed to the seasonal weakness in Q3, when client operations typically slow down due to holidays. While major markets such as North America and continental Europe remained under pressure, growth markets like India (up 70.2%) and West Asia & Africa (up 15%) showed resilience. However, North America declined 2.3% and continental Europe saw a contraction of 1.5%.
Among verticals, energy, resources and utilities grew by 3.4%, and consumer business gained 1.1%. The key segment – banking, financial services and insurance (BFSI) – reported a modest sequential growth of 0.9%, compared to 0.1% in Q2.
Chief executive officer K Krithivasan highlighted the robust deal pipeline, stating, “We are pleased with the excellent TCV performance in Q3, which was well-rounded across industries, geographies and service lines. BFSI and consumer business groups returning to growth, alongside early signs of revival in discretionary spend, lend visibility to long-term growth”.
He added, “The majority contribution of growth in India and regional markets came (from projects) other than BSNL.
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