TCS Q4 PAT rises 1.61% QoQ to Rs 9,926 cr; recommends final dividend of Rs 22/share

The IT major's consolidated net profit rose 1.61% to Rs 9,926 crore on 3.49% increase in net sales to Rs 50,591 crore in Q4 March 2022 (Q4 FY22) over Q3 December 2021 (Q3 FY22).

On a year-on-year (YoY) basis, the IT major's net profit rose 7.35% and net sales rose 15.76% in Q4 FY22.

Constant currency revenue grew 14.3% YoY in Q4 FY22. Operating margin stood at 25% while net margin was at 19.6% in Q4 FY22.

Profit before tax rose 1.31% to Rs 13,364 crore in Q4 FY22 as against Rs 13,191 crore in Q3 FY22. Operating cash flow during the quarter was 111.3% of net income.

TCS' consolidated net profit rose 18.18% to Rs 38,327 crore on 16.80% increase in net sales to Rs 1,91,754 crore in the year ended 31 March 2022 over the year ended 31 March 2021. Constant currency revenue grew 15.4% YoY in FY22. Operating margin stood at 25.3% in FY22.

The company reported highest ever order book total contract value (TCV) of $11.3 billion in Q4 March 2022 and $34.6 billion in the year ended March 2022.

The board recommended a final dividend of Rs 22 per share.

All verticals grew in the mid to high teens. Growth was led by Retail and CPG (22.1%), Manufacturing vertical (+19%) and Communications & Media (+18.7%). Technology & Services grew (+18%) and Life Sciences and Healthcare grew (+16.4%) while BFSI grew (+12.9%).

On a full year basis, growth was led by Retail and CPG (20.6%), Manufacturing vertical (+19.4%), Life Sciences and Healthcare (+19.2%). BFSI grew (+16.7%), Technology & Services grew (+15.8%) and Communications & Media grew (+14%).

Growth among markets was led by North America which grew (+18.7%). UK grew (+13%), Continental Europe grew (+10.1%). Among emerging markets, Latin America grew (+20.6%), Middle East & Africa grew (+7.3%), India grew (7%), and Asia Pacific grew (+5.5%).

On a full year basis, among major markets, North America grew (+17.5%), Continental Europe grew (+15.1%) and UK grew (+14.3%). In emerging markets, Latin America grew (+18.2%), India grew (+16%), Middle East & Africa grew (12.9%) while Asia Pacific grew (+6.7%) growth.

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.

IT services attrition rate (LTM) continued to climb, reaching 17.4% in Q4 FY22 as against 15.3% in Q3 FY22. However, incremental attrition has moderated, TCS said in the statement.

Rajesh Gopinathan, chief executive officer and managing director, said: We are closing FY 22 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 a strong and sustainable foundation for continued growth ahead.

N Ganapathy Subramaniam, chief operating officer and executive director, said: It is immensely satisfying to close the year with robust, broad-based growth, industry-leading margins and the highest ever order book. During the year, we took on technologically challenging, industry-first transformational programs and brought to bear the full power of TCS' capabilities and that of our partner ecosystem, to successfully deliver market-changing outcomes. Our continued investments in building newer capabilities, our passion for innovation, our contextual knowledge and most importantly, our self-belief have been key to this, and these position us very well for continued success ahead.

Samir Seksaria, chief financial officer, said: While continuing to make all the investments needed to support our growth aspirations, we managed the headwinds this year to deliver 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.

Tata Consultancy Services is an IT services, consulting and business solutions organization. It offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions.

Shares of TCS rose 0.26% to settle at Rs 3696.40 on the BSE today.

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