TCS announces quarterly net profit of $1b amid CEO change

India's largest IT service provider has announced Rajesh Gopinathan as its new CEO, replacing N Chandrasekaran, as well as a Q3 net profit of $1 billion.
Written by Jonathan Chadwick, Contributor

IT services and consultancy firm Tata Consultancy Services (TCS) has announced year-on-year revenue growth of 5.8 percent to $4.38 billion for the third quarter ending December 31, 2016, attributing the growth to strong digital demand.

The firm reported operating income of $1.14 billion and quarterly net profit of $1 billion, while digital revenues stood at 16.8 percent, up 30 percent year-on-year.

Also at the weekend, TCS announced the appointment of Rajesh Gopinathan to the role of CEO and managing director of the company.

Effective February 21, Gopinathan takes over from N Chandrasekaran, who has been appointed chairman of Tata Sons. Gopinathan joined TCS in 2001 and was appointed its chief financial officer in 2013. Prior to this, he was vice president for Business Finance.

Of the quarterly results, Gopinathan said, "We have shown great discipline and control at all levels to deliver another credible quarter. Alongside a good growth performance, we have been able to keep profitability stable in our desired range and deliver over $1 billion in free cash flow during the quarter."

Growth in the quarter was led by energy and utilities, hi-tech, BFSI, manufacturing, and retail, the company said, while growth in asset-leveraged solutions, infrastructure services, and engineering and industrial services was bolstered by the strength of the platforms, cloud, and Internet of Things segments.

Emerging markets such as Latin America and India grew quarterly 12.5 percent and 10.3 percent, respectively, the company said, while North America grew by 2.2 percent and the United Kingdom by 1.7 percent.

The firm also named N Ganapathy Subramaniam, currently president of TCS Financial Solutions, as president and COO, and appointed him as director on the board.

As of December 31, 2016, the company said it had applied for 3,161 patents, including 80 in the quarter, and to date has been granted 440 patents.

In 2015, TCS expanded its operations in Singapore, opening a new centre to service global banks operating in the Asia-Pacific region.

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