TCS Q3FY25 Results: Net profit rises 12% YoY, ₹66 special dividend declared; check key takeaways

The Tata Group company’s net profit in Q3FY25 increased 12% year-on-year, while the revenue from operations grew 5.6% YoY. Here is a look at the major financial metrics of TCS Q3 results.

Revenue, PAT and operating margin

The IT services company reported a consolidated net profit of ₹12,444 crore for Q3FY25, up 12.13% on a yearly basis from ₹11,097 crore in Q3FY24. Sequentially, the net profit was up 4% from ₹11,955 crore.

The company’s net profit was in line with street expectations, as experts predicted the PAT (profit after tax) to be around ₹12,490 crore.

The consolidated revenue from operations in Q3FY25 stood at ₹63,973 crore, up 5.6% YoY compared to ₹60,583 crore in Q3FY24. However, on a quarter-on-quarter basis, the revenue was down 0.4% from ₹64,988 in Q2FY25. The revenue was also in line with street estimates.

The company reported that in the December quarter, revenue from its Indian markets grew 70% year-on-year, followed by the Middle East & Africa (MEA) region at 15%. Latin America and Asia Pacific regions contributed 7% and 5.8% revenue growth, respectively.

TCS’ operating margin in Q3FY25 stood at 24.5%, a decline of 50 basis points YoY. The net income of the company grew 5.5% YoY at ₹12,380 crore, while the net margin was reported at 19.4%.

Attrition Rate

The company informed in its stock exchange filing that its total employee headcount stood at 6,07,354 at the end of Q3FY25. As much as 35.3% of the employees were women.

This was a sequential net decline of 5,370 employees. In Q2, the total number headcount at TCS stood at 6,12,724.

The attrition rate in the IT services segment stood at 13% in the period under review, up from 12.3% in the last quarter.

According to the stock exchange filing, TCS has employees from 152 nationalities.

The company promoted over 25,000 associates this quarter, its chief human resource officer Milind Lakkad said.

“We promoted over 25,000 associates this quarter which brought the total promotions this financial year to more than 110,000. We continue to invest in employee upskilling and overall well-being. Our campus hiring for the year is going according to plan and preparations are afoot to onboard a higher number of campus hires next year,” he said.

Special dividend of ₹66 per share announced

The company's Board of Directors approved a third interim dividend of ₹76 per equity share of ₹1 face value for FY25, including a special dividend of ₹66. The record date for the dividend payment has been set as Friday, January 17, 2025. Eligible investors will receive the third interim dividend on February 3.

Major deals and growth areas

Cyber Security, AI.Cloud and TCS Interactive led the growth this quarter for the company.

Gen AI/AI and Cloud services continued to see significant growth for TCS. Cyber Security services and solutions also saw strong growth, led by Technology, Software and Services and BFSI industry units. TCS interactive services saw good traction this quarter. BFSI and CBG led growth in industry segments.

In cognitive business operations this quarter, TCS saw multiple large order wins across end-to-end IT IS services, Digital Workplace, Data Centre, Network, Customer Experience, HR and Finance.

The company signed a multi-year deal to help Air France-KLM, to become the most data-centric airline group in the world. The company also secured a 15-year contract with Ireland’s Department of Social Protection (DSP) to implement and support the country’s new Auto Enrolment Retirement Savings Scheme, known as the “My Future Fund.”

Further, a US-based telecom major has entered a 5-year strategic relationship with TCS to provide managed services for specific solutions.

Management commentary

Speaking about the Q3 results, TCS CEO and Managing Director K Krithivasan said there were early signs of revival in discretionary spends.

“We are pleased with the excellent TCV performance in Q3 which was well-rounded across industries, geographies and service lines lending good visibility to long-term growth. BFSI and CBG returning to growth, continued stellar run of Regional Markets and early signs of revival in discretionary spend in some verticals give us confidence for the future. Our continuing investments in upskilling, AI/Gen AI Innovations and partnerships sets us up to capture the promising opportunities ahead,” he said.

Chief Financial Officer Samir Sekrasia said that the company’s strong currency risk management helped deliver healthy margin improvement.

“In a quarter that saw significant cross-currency volatility, TCS’s strong execution, cost management and deft currency risk management helped deliver healthy margin improvement and free cash flows. Disciplined investments in talent and infrastructure should lend good support to long-term business growth,” he said.