Q3 results: UK drives growth for TCS in seasonally 'slow' quarter

Tata Consultancy Services (TCS) reported better-than-expected results in the third quarter (October –December) of the current financial year, on the back of robust growth in the UK.

In a seasonally slow quarter, TCS reported a net profit of Rs 11,058 crore, up 2 per cent year-on-year (Y-o-Y). This was the fourth straight quarter when growth for the IT behemoth was driven by plum orders from the UK. The company’s geography grew at 8.1 per cent Y-o-Y.
 

The company also saw green shoots emerging in Europe, which grew by 0.5 per cent. What was disappointing was the growth from the US markets, which fell by 3 per cent.
 

The company is confident that the UK, which contributes 16.4 per cent, will continue to drive growth in the coming quarters.

“What is driving growth in the UK is our investments in the platform we have built. We have enough room to grow in the region,” said N Ganapathy Subramaniam, chief operating officer and executive director of TCS.
 

Revenues for the quarter at Rs 60,583 crore were up 4 per cent Y-o-Y and 1.7 per cent in constant currency. On a sequential basis, revenue was up 1.5 per cent.
 

TCS beat Bloomberg’s estimates on revenue growth. It had estimated revenue at Rs 60,259 crore but missed net profit estimates. Bloomberg estimated PAT at Rs 11,625 crore. When asked if there are any signs of green shots or change in the macro environment, the management said that nothing much has changed compared to the last quarter. “The situation has not dramatically changed from the last quarter. Our deal wins have been robust, especially with no mega deal win this quarter. There is a demand in the market and we need to capture it,” said Subramaniam.