TCS reports all-time high contract value at $42.7 billion, 5 Key takeaways from TCS Q4 results

Indian IT giant Tata Consultancy Services (TCS) Ltd reported a decent growth in net profit in the quarter ending March 2024, while its revenue increased moderately. In its quarterly results released for the three month period and full financial year ending March 31,2024, TCS Ltd reported a 12.6% year-on-year (YoY) growth in consolidated net profit at ₹12,502 crore while its revenue increased 3.4% YoY in Q4FY24 to ₹62,394 crore.

Here are five key takeaways from TCS earnings report for the quarter and year ended on March 31, 2024.

1. Highest ever order book

TCS witnessed record deal wins in the March 2024 ended quarter, validating the company’s robust business model as well as excellence in execution. Its total contract value (TCV) stood at a record $13.2 billion in the quarter.

For the financial year 2023-24 (FY24), the IT services provider’s order book stood at an all-time high of $42.7 billion. Its products and platforms business signed a mega deal of 15-year partnership expansion with Aviva in the March 2024 quarter. Aviva is a leading insurance, wealth management and retirement planning services provider in the United Kingdom.

2. PAT rises over 12.6% YoY, revenue up more than 3%

TCS recorded a single-digit growth of 3.5% year-on-year (YoY) in consolidated revenue from operations at ₹61,237 crore in the final quarter of FY24 compared to ₹59,162 crore in the same period last year, while its total income also climbed in tandem to ₹62,394 crore for the quarter. The rise in revenue was led by a healthy 37.9% jump in TCS’ India business, 6.2% uptick in UK business, and a 9.7% growth in the company’s Manufacturing business.

The Energy, Resources and Utilities vertical grew by 12.6% in Q4FY24, while the Manufacturing and Life Sciences and Healthcare sectors grew 7.3% and 4.8%, respectively in the quarter. The Tata group company reported a 12.6% rise in its profit after tax (PAT) for the quarter ended March 31, 2024, at ₹12,502 crore versus ₹11,436 crore in the corresponding quarter of the previous fiscal year.

3. Strong margin expansion

TCS reported robust operating margins in Q4FY24 as well as the financial year 2023-24. Its operating margin expanded by 100 basis points (bps) to 26% compared to 25% in the December quarter.

“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,” said Samir Seksaria, Chief Financial Officer of TCS in a press release.

4. Final dividend proposal

The country’s largest software exporter has also recommended a final dividend of ₹28 per equity share of ₹1 each. The dividend will be paid to respective shareholders on the fourth day of conclusion of the company's 29th Annual General Meeting (AGM).

5. Attrition Rate

TCS reported that its attrition rate reduced to 12.5% for the last 12 months ending March 2024.

“The reduced attrition at 12.5%, enthusiastic response to our campus hiring, increased customer visits and employees returning to the office have resulted in great vibrancy in our delivery centres and elevated morale of our associates,” stated the company’s Chief HR Officer, Milind Lakkad on April 12, 2024.

The company’s total workforce stood at over 6 lakh employees from across 152 nationalities as on March 31, 2024. The employee base included 35.6% women workers, the company said. Shares of TCS closed 0.48% higher at ₹4,330.8 apiece on the NSE.