TCS Q3FY22 Results: Profit rises 1.50% QoQ to Rs 9,769 crore; announces Rs 18,000 crore buyback

Tata Consultancy Services (TCS), India's largest IT company in India, on Wednesday reported a 1.50 per cent QoQ rise in the consolidated profit at Rs 9,769 crore for the quarter ended December 31, 2021 (Q3FY22). It had posted a profit of Rs 9,624 crore in the previous quarter ended September 30, 2021 (Q2FY22). On a year-on-year basis, the profit grew 12.27 per cent at Rs 8,701 crore in the corresponding quarter last year (Q3FY21).

Its revenue from operations grew 4.30 per cent at Rs 48,885 crore in Q3FY22 compared to Rs 46,867 crore posted in September 2021 quarter. Revenue in dollar terms grew 3 per cent QoQ to $652.4 crore in December 2022 quarter compared to $633.3 crore posted in September 2021 quarter.

The company's EBIT grew 2 per cent QoQ to Rs 12,237 crore compared to Rs 12,000 crore posted in the previous quarter. Its margins dropped to 25 per cent in Q3FY22 from 25.6 per cent posted in Q2FY22.

Besides, TCS has announced a third interim dividend of Rs 7 per share. The record date for the dividend is January 20, 2022, and the dividend will be credited by February 7, 2022.

The company also announced share buyback at Rs 4,500 per share. The company will buy back shares worth Rs 18,000 crore. The company has achieved a milestone of hitting the $25 billion annual revenue mark (CY2021). All Industry Verticals Grow Mid- to High Teens.

It said that company's IT Services attrition rate was at 15.3 per cent in Q3FY22 against 11.9 per cent in Q2FY22.

Rajesh Gopinathan, Chief Executive Officer and Managing Director said, "Our continued growth momentum is a validation of our collaborative, inside-out approach to our customers' business transformation needs. Customers love our engagement model, our end-to-end capability, and our can-do approach to problem-solving. While mapping out their innovation and growth journeys, we are also helping them execute new-age operating model transformations to support those journeys."

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said, "We continued our focus on growing organically and on developing the talent, methodologies, and toolkits for an ever-evolving technology landscape. This, coupled with our contextual knowledge and the passion and commitment of thousands of TCSers enabled us to deliver cutting-edge solutions during the quarter and help our clients realize speed to value. We are also delighted to cross another important milestone in our journey, hitting the $25 billion revenue mark in CY 2021."

Q3 Segment Highlights

Industries: All verticals grew in the mid to high teens. Growth was led by Retail and CPG (20.4 per cent), BFSI (+17.9 per cent) and the Manufacturing vertical (+18.3 per cent). Technology & Services grew +17.7%, Life Sciences and Healthcare grew +16.3 per cent and Communications & Media grew +14.4 per cent.

Markets: Among major markets, growth was led by North America (+18 per cent) and Continental Europe (+17.5 per cent) while the UK grew +12.7 per cent. Among emerging markets, growth was led by Latin America (+21.1 per cent) and India (+15.2 per cent), followed by the Middle East & Africa (+6.9 per cent) and the Asia Pacific (+4.3 per cent).

Services: Q3 witnessed a clear trend of enterprises investing confidently in technology initiatives for longer-term growth. There was broad-based growth across all services, led by Cloud, Cyber Security, Consulting & Services Integration and IoT & Digital Engineering.

Consulting & Services Integration: C&SI continues to focus on growth & transformation initiatives for clients with proactive propositions combining TCS contextual knowledge, technology & domain expertise integrating multiple services across our practices. Cloud Strategy & Transformation, Customer Experience, Finance & Shared Services transformation led growth in the quarter.

Cloud Platform Services: Accelerated cloud adoption by enterprises drove growth in application transformation, IT landscape modernization, shift to hybrid cloud, and data modernization on the cloud. TCS won the AWS 2021 Rising Star Partner of the Year (GSI, for the USA) & AWS Application Transformation and Migration Partner of the Year (for ANZ) awards.

Digital Transformation Services: Key G&T themes that saw traction in Q3 include connected enterprise, product innovation, customer experience transformation and security services. Engineering and IoT services are enabling customers to gain complete traceability of products across the value chain, manage assets, innovate products, re-design plants and improve predictability & operational efficiency. This drove growth in Intelligent devices, GIS and Plant Solutions & Services. IoT, Engineering and Analytics services are also helping customers in their sustainability journey, a critical business priority. We are enabling clients on their digital ERP journey leveraging TCS Crystallus™ to empower enterprise digital transformation and drive business value. Oracle Cloud and Niche SaaS transformations led to growth this quarter. TCS' Cyber Defence Suite and globally distributed Threat Management Centers steered growth during the quarter with agile, localized, regulatory compliant security services across ransomware protection, cloud security and managed security services with strong market resonance.

Cognitive Business Operations: Demand was propelled by customers seeking to outsource IT and business operations to drive business agility, operational resilience, and cost-efficiency. Growth in Q3 was led by Enterprise BPS, Infrastructure transformation and automation services. MFDM™ and Cognix™ continue to demonstrate strong market relevance and deliver customer delight.

As of December 31, 2021, the company has applied for 6,396 patents, including 227 applied during the quarter, and has been granted 2,201 patents.