TCS Q4 net profit rises 7% to Rs 9,926 cr, revenue surges 16%

The company's board recommended final dividend of Rs 22 per equity share for Q4FY22; India's top IT exporter benefited from a wave of digital transformation sweeping across the globe

The country's largest software services firm, Tata Consultancy Services (TCS), on Monday reported a 7% rise in consolidated net profit to Rs 9,926 crore for the March 2022 quarter. This is against a net profit of Rs 9,246 crore in the year-ago period, TCS said in a regulatory filing. 

The consolidated revenue of the IT major grew 16% to Rs 50,591 crore in the quarter under review from Rs 43,705 crore a year ago, while banking and finance segment revenue rose 11.2% to Rs 19,532 crore, it added. The company crossed the Rs 50,000-crore revenue mark for the first time in Q4FY22.

India's top IT exporter benefited from a wave of digital transformation sweeping across the globe. Full-year net income grew 14.8% to Rs 38,327 crore.

The company's board recommended final dividend of Rs 22 per equity share for Q4FY22. 

"We would like to inform you that at the Board Meeting held today, the Directors have recommended a Final Dividend of Rs 22 per Equity Share of Re l each of the Company which shall be paid/dispatched on the fourth day from the conclusion of the 27th Annual General Meeting, subject to approval of the shareholders of the Company," the company said.

On Monday, the company's scrip on BSE closed trading 0.2% higher at Rs 3,696.40.

Rajesh Gopinathan, the chief executive and managing director, told reporters that the quarter witnessed the higher-ever incremental revenue addition of $3.533 billion and an all-time high order book of $11.3 billion, which for the full year stood at $34.6 billion.

The total income rose 15.8% to Rs 50,591 crore in the quarter, Gopinathan said, adding they could maintain an industry-leading operating margin of 25.3%, which is down 180 bps from the year-ago quarter, while the net margin stood at a healthy 19.6%.

We have closed FY22 on a strong note, with mid-teen growth and adding the maximum incremental revenue ever. Increasing participation in our customers' growth and transformation journeys, and an all-time high order book provide us with a strong and sustainable foundation for continued growth ahead, Gopinathan added.

He attributed the "robust broad-based growth and industry-leading margins to their continued investments in building newer capabilities.

In Q4, TCS added 35,209 employees on a net basis, the highest ever net addition in a quarter. Employee headcount stood at 592,195, a net addition of 103,546 during the year, another all-time high. "The workforce continues to be very diverse, comprising 153 nationalities and with women making up 35.6% of the workforce," said TCS. 

TCS closed fiscal 2022 with a bang, crossing for the first time $25 billion annual revenue of Rs 1.91 trillion, up 16.8%, driven by the highest-ever incremental revenue of $3.533 billion and an all-time high order book.

TCS posted its highest-ever order book total contract value of $11.3 billion in the quarter and posted operating margin of 25.3% in FY22.

Its annual profit jumped 14.8% to Rs 38,327 crore. On a sequential basis, the revenue grew 3.2% in constant currency terms.

The company added 10 clients in the $100 million-plus bucket, 19 in the $50 million-plus range, 40 in the $20 million and 52 in the $10 million-plus bucket, he said.

Samir Seksaria, the chief financial officer, said TCS has managed the headwinds well and delivered an industry-leading operating margin yet again. The successful completion of our fourth buyback in five years is another milestone in our shareholder-friendly approach to capital allocation.

Seksaria said all verticals grew in the mid to high teens during the quarter. Growth was led by retail and CPG (22.1%), manufacturing (19%) and communications & media (18.7%), technology & services (18%) and life sciences and healthcare grew over 16.4%, while BFSI grew at a slower pace of 12.9%.

The record growth was led by North America, which grew over 18.7%, England 13%, Continental Europe (10.1%), Latin America (20.6%), the Middle East & Africa (7.3%), India (7%), and Asia Pacific (5.5%).

The company has a free cash flow of Rs 39,181 crore, which is 111.3% of net income and returned Rs 31,424 crore of cash to shareholders through buybacks and dividends.