Last Updated on January 16, 2024 by BFSLTeam BFSLTeam
On January 11, 2024, Tata Consultancy Services Limited (BSE, NSE, NYSE: TCS) announced its Q3 2023-24 financial results, reporting sustained cloud demand and operational excellence along with revenue growth.
Additional Read: Quarterly Results Dashboard
Table of Content
Consolidated Result Takeaways
Here are the overall consolidated highlights in Q3 results:
- For Q3, Revenue stood at ₹60,583 Cr, marking a growth of 4.0% YoY, and a growth of 1.7% YoY in constant currency.
- The Operating Margin for Q3 was at 25.0%, exhibiting an expansion of 0.5% YoY.
- Net income for this quarter stands at ₹11,735 Cr, signalling a growth of 8.2% YoY. The Net Margin was at 19.4%.
- In Q3, the Net Cash from Operations was at ₹11,276 Cr, marking 102% of Net Income.
- For Q3, TCS is proud to note that it is an inclusive place of work, diverse in nature, with 35.7% of women making up a portion of the total workforce, and 153 nationalities comprising the TCS workforce.
- In Q3, TCS effectively invested in its workforce with 39.7 million learning hours clocked YTD and 3.7 million competencies YTD.
- For Q3, the LTM IT Services attrition rate was at 13.3%.
- TCS has announced dividends in Q3 (Record date 19/01/2024) – ₹27.00 Dividend per share, including a special dividend of ₹18.00 (Payment date 5/02/2024).
Key Segment Highlights – Tata Consultancy Services
Q3 marked significant growth in TCS industry segments as shown below:
- Industries: The Energy, Resource, and Utilities vertical proved to be the leader for growth, showing 11.8% growth. Manufacturing grew by 7.0%, Life Sciences and Healthcare grew by 3.1%, and Regional Markets witnessed a growth of 19.2%.
- Markets: In Q3, the UK market was the top growth player with 8.1% growth, while Europe grew by 0.5%, the Middle East and Africa grew by 16.0%, Asia Pacific grew by 3.9%, and Latin America grew by 13.2%. In terms of emerging markets, India was the growth leader, showing 23.4% growth.
- Services: Regarding Service Lines, AI. Cloud was the leader, and there was a robust momentum for Cloud migrations. Apart from this, Q3 witnessed a rising interest in customers for Generative AI and AI. There was also an increased demand for Cyber Security Services and Cognitive Business Operations as well as for Enterprise Solutions.
Additional Read: TCS Share Price
Management Commentary
The top management of Tata Consultancy Services Limited had some insights on the results and these are shared below:
- The CEO and MD of TCS commented that the robust performance in Q3, otherwise a seasonally weak period due to macroeconomic headwinds, shows the strength of the company and its proficient business model. Furthermore, the company meets challenges because of its well-diversified portfolio and its trademark customer-focused strategies. Across markets, TCS is witnessing a period of healthy deal momentum providing the company with a strong order book. Additionally, the company is witnessing great interest in the space of Generative AI, leading to exploration and innovation by the company in this arena.
- The COO and Executive Director of TCS remarked that the company has shown marked progress in Q3 concerning nationally important projects. This shows the strength of the company’s execution in operations. Furthermore, the company’s platforms and products saw new go-lives and wins. Additionally, TCS is on the right path concerning its BSNL 4G/5G rollout. The company is also making efficient progress in upskilling employees in the field of Generative AI via the company’s own AI playground platform.
- The CFO stressed that Q3 success and the overall company’s positive results were the results of TCS’ disciplined operational vigour and stringent execution, adding that the company’s investment in its infrastructure, innovation, and people are the key drivers that make TCS stand out and promote value for all involved stakeholders.
- The Chief HR Officer of TCS commented that the workplace of the company is one of energy and vibrancy as more employees are opting to work from the company’s offices. Attrition is at 13.3%, trending downward, and in a comfort zone for the company. Apart from this, TCS is committed to hiring employees from educational institutions and organically building talent. For the next year, the company has begun its college hiring process with freshers showing great excitement to join the company.
Other Tata Consultancy Services Q3 Achievements
In Q3, the company has made many strides in its path towards growth. Here are the key achievements seen in the quarter:
- TCS has been selected as the strategic partner by a top UK-based bank, relating to its leasing operations and motor finance business. TCS will provide services by leveraging its trademark Interactive Studio.
- Australia’s main securities exchange, ASX, has chosen TCS to offer a next-generation settlement and clearing platform in order to provide services to the Australian markets.
- An international manufacturing company has selected TCS to provide it with services related to supply chain, design engineering, and logistics support. Leveraging Generative AI, TCS will develop a digital assistant to offer solutions for distinct scenarios in the client’s shopfloor operations.
- TCS has collaborated with the Munch Museum in Oslo. This has been done to create interactive and immersive drawing experiences for museum visitors as well as for international spectators.
- TCS has been chosen by a healthcare company based in the US, for the purpose of reimagining its present operating business model.
- Australia’s top telecommunications company, TPG Telecom, has selected TCS to be its strategic transformation partner in technology.
- Many other partnerships have been witnessed in Q3, including with more UK companies and a German company, besides other European businesses.
- In terms of Innovation and Research, TCS has made applications for 7,852 patents so far, with 187 in Q3. The company has been granted more than 3,000 patents so far, including 305 patents being granted in Q3.
- The TCS employee base remains diverse and strives towards more inclusion with each quarter.
Q3 Accolades
The company has won many accolades in Q3, the main ones of which are listed below:
- Won the Amazon Web Services GSI Partner of the Year 2023 – Global and the Amazon Web Services Partner of the Year 2023 – France awards.
- For the fourth consecutive year, TCS earned the 2023-2024 Microsoft Business Applications Inner Circle award.
- TCS was awarded the Microsoft 2023 Customer Service Partner of the Year award.
- At the Brandon Hall Technology Excellence Awards 2023, the company won 7 gold awards.
- TCS has been ranked No. 1 for Customer Satisfaction in Service Delivery in Spain (by Whitelaned Research).
- TCS earned the distinction of being ranked as a “Leader” in 38 competitive assessments made by top research organisations in Q3.
Financial Results
Here are the financial results of Q2 (Profit and Loss Financial Results) in a nutshell (all figures in ₹ Cr, except where indicated by %):
| Metrics | Q3 FY 2023-24 (Reported) | Q3 FY 2022-23 |
| Revenue | 60,583 | 58,229 |
| Profit Before Tax | 14,829 | 14,644 |
| Profit After Tax | 11,097 | 10,883 |
| Net Profit | 11,058 | 10,846 |
About Tata Consultancy Services Limited
Tata Consultancy Services, aka TCS, is a company that deals with business organisation, IT services, and consulting and business solutions. The company has, in its long and distinguished history, partnered with some of the largest international businesses, proving its mettle over 55 years in the industry. TCS is largely led by its consulting strength and cognitive-based services, employing advanced technology and engineering in its multitude of solutions. The company boasts of a Location-Independent Agile trademark delivery service that sets it apart from its sector competitors. In the field of software development, this service serves as a benchmark.
As a key part of one of India’s largest and most prominent multinational group of companies, the Tata Group, TCS is based in 55 countries with more than 608,000 proficient consultants under its helm. In the financial year that ended 31 March 2023, the company posted revenues of USD 27.9 billion (consolidated revenues). The company is listed on the BSE, NSE, and the NYSE. Tata Consultancy Services’ proactive stand on the area of climate change and accolades for working with diverse world communities have earned the company pride of place in the top sustainability indices like the FTSE4 Good Emerging Index and the MSCI Global Sustainability Index. In Q3 FY24, the company remains at the top of its game in terms of operational excellence.
Disclaimer: Investments in the securities markets are subject to market risks, read all related documents carefully before investing
This content is only for educational purposes.
Securities quoted are exemplary in nature and not recommendatory.
