TCS posts $4.15b Q3 revenue along with single digit growth

IT services and consultancy firm Tata Consultancy Services (TCS) has reported third-quarter revenue growth of 5.5 percent year-on-year to $4.15 billion.

For the three months ending December 31, income before tax for the company was just over $1.2 billion, with net income just shy of a billion dollars, at $926 million.

India's largest IT services provider said its growth in Q3 was 'holistic' with all industry segments showing sequential growth. TCS said life sciences and healthcare, manufacturing, and hi-tech sectors led the way for the quarter.

"All our industry segments have exhibited growth in a traditionally weak quarter additionally accentuated by the impact of the Chennai floods. Our international business has grown smartly in [constant currency] terms with North America and Europe leading the way among major markets and Latin America among growth markets," TCS CEO and managing director N Chandrasekaran said.

"Digital will remain the core focus for enterprise IT in 2016 as our customers respond to competition in a global economy driven by real-time insights.

"With 13.7 percent of our revenues coming from digital business and this segment growing at a higher sequential rate, TCS is playing an impactful role in partnership with customers."

Digital business growth for the quarter was 4 percent.

Despite posting a positive result, the company's CFO Rajesh Gopinathan said that the quarter was not as straightforward as expected.

"In a challenging quarter with significant cross currency and other headwinds, we have operated with rigour and discipline to deliver credible margin performance and generated excellent cash flows," he said.

Amongst the company's key wins for the quarter was a multi-year application management and service delivery transformation deal with an unnamed large global bank; a quality assurance and environment management services contract with a UK-based grocery retailer; and an infrastructure transformation deal arrangement with a large European Airline. TCS also entered into a strategic partnership with a large North American mutual life insurance company to provide end to end application management services

Also during the third quarter, TCS applied for 90 patents to add to its current 302, and added 22,118 more staff to its operation.

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

"Singapore is our regional headquarters for APAC operations, and we are committed to expand our presence in this market and to assist our global clients," Girish Ramachandran, Asia-Pacific president of TCS said at the time.

The company said the 1,000-seat banking and financial services facility is part of the business that accounts for more than 40 percent of TCS' overall revenue.

For the 2015 financial year, TCS posted revenue of $15.5 billion, with operating income coming in at $4.2 billion, representing growth of 6 percent.

APAC revenue grew by 50 percent over the year, and at the time accounted for 9.3 percent of the company's total revenue.

"We have maintained our profitability in a challenging operating environment, where currency has been a strong headwind for some time," Gopinathan said at the time. "Despite these and other macro challenges, our goal has been to support business growth, while ensuring we continue to invest in a calibrated fashion for the future."

For the third quarter of 2014, TCS's revenue grew by 14.3 percent year-on-year to $3.93 billion; net income for the same period was up 4.4 percent year on year, at $873 million.