TCS gained 1.48% to Rs 3166.50 after the IT major reported 16.4% rise in consolidated net profit to Rs 8,701 crore on a 4.7% increase in revenue to Rs 42,015 crore in Q3 December 2020 (Q3 FY21) over Q2 September 2020 (Q2 FY20).TCS said the September quarter net profit had a post-tax one-time impact of Rs 958 crore due to provision for ongoing litigation with EPIC.
The company's consolidated net profit has grown by 7.2% and revenue has risen by 5.4% in Q3 FY21 over Q3 FY20.
Profit before tax (PBT) in Q3 FY21 stood at Rs 11,692 crore, up by 16.5% from Rs 10,037 crore in Q2 FY21. Sequentially, total tax expense during the third quarter has increased by 17.1% to Rs 2,965 crore.
TCS said that constant currency revenue for Q3 FY21 rose 4.1% quarter-on-quarter and 0.4% year-on-year. The IT major's operating margin stood at 26.6% in Q3FY21 compared with 26.2% in Q2FY21. Net margin stood at 20.7% in Q3FY21.
TCS said that all its verticals showed good sequential growth, led by Manufacturing (+7.1%), BFSI (+2%), Life Sciences and Healthcare (+5.2%), Communications & Media (+5.5%) and Retail and CPG (+3.1%). On a year on year, constant currency basis, Life Sciences and Healthcare continued to grow in double digits at 18.2%. BFSI (+2.4%) and Technology & Services (+2.4%) also moved into positive territory.
Sequential growth was led by North America (+3.3%), India (+18.1%), UK (+4.5%), and Continental Europe (+2.5%). Other markets grew as well, with and Asia Pacific growing +2.6%, MEA +6.7%, and Latin America +3.1%.
The IT firm continued to witness a strong rebound in growth and transformation services as customers seek to operationalize new models. Growth in the quarter was led by Cloud Services, Analytics & Insights, Cognitive Business Operations, IoT and Quality Engineering & Transformation Platform Services.
TCS' consolidated headcount stood at 469,261 as of 31 December 2020. In Q3, its IT services attrition rate (LTM) was at 7.6%.
As on 31 December 2020, the company has applied for 5,634 patents, including 134 applied during the quarter, and has been granted 1,713 patents.
The company's net cash from operations in Q3 FY21 was Rs 11,952 crore. TCS declared an interim dividend of Rs 6 per share. The record for the same is 16 January 2021 while the payment date is 3 February 2021.
Commenting on the Q3 performance, Rajesh Gopinathan, CEO and MD said, Growing demand for core transformation services and strong revenue conversion from earlier deals have driven a powerful momentum that helped us overcome seasonal headwinds and post one of our best performances in a December quarter. We are entering the new year on an optimistic note, our market position stronger than ever before, and our confidence reinforced by the continued strength in our order book and deal pipeline."
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director said, "Our Q3 growth is a very satisfactory outcome of our ability to leverage the proactive investments made to capture the strong demand and be meaningful to our clients. It is a strong endorsement of our resilience, way of working and the relative competitiveness of our products and services. We celebrated the accomplishment of our Enterprise Agile by 2020 vision during the quarter, and with SBWS, we have a well-oiled location-independent execution model that brings in the resources just in time, efficient execution, and machine-led delivery governance that are delighting our customers. All these augur well to progress our 25x25 future of work vision."
V Ramakrishnan, Chief Financial Officer said, "Strong growth across all our verticals, and operational benefits from our SBWS model allowed us to post the highest operating margin in the last five years, even after rolling out a salary increase this quarter. We also had an a/I-time high cash conversion in Q3. This and our strong balance sheet position us very strongly to seize the opportunities that the current market offers, and more closely partner our customers in their growth and transformation journeys."
TCS is an IT services, consulting and business solutions organization.
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