Tata Consultancy Services (TCS), a global leader in IT services, has announced its financial results for the quarter ending September 30, 2023, showcasing robust growth and a positive outlook.
TCS has reported a revenue of ₹ 59,692 crore, marking an impressive 7.9 percent growth for July-September 2023.
The operating margin stood at 24.3 percent, indicating a 0.3 percent expansion, TCS said.
The net income was ₹ 11,342 crore, reflecting a notable 8.7 percent increase. Net margin of TCS was 19 percent.
K Krithivasan, Chief Executive Officer and Managing Director of TCS, highlighted the company’s commitment to driving digital transformation initiatives for clients. He mentioned the strong deal momentum and a substantial order book in Q2, emphasizing the resilience of demand and the promising growth prospects.
N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, emphasized the company’s continued investments in people and new technologies. He underlined TCS’s significant pool of Gen-AI Ready consultants and engineers engaged in various Gen-AI projects, showcasing the company’s dedication to staying at the forefront of technological innovation.
Performance Across Industries and Markets:
Industries: Growth was led by the Energy, Resources, and Utilities vertical with a substantial 14.8 percent growth. Manufacturing and Life Sciences & Healthcare also showed strong growth at 5.8 percent and 5 percent respectively. However, Consumer Business Group (CBG) grew by 1 percent, while BFSI showed a slight decline of -0.5 percent.
Markets: The United Kingdom led among major markets with an impressive 10.7 percent growth. North America and Continental Europe showed moderate growth at 0.1 percent and 1.3 percent respectively. In emerging markets, the Middle East & Africa and Latin America demonstrated substantial growth at 15.9 percent and 13.1 percent respectively. Asia Pacific and India also displayed healthy growth at 4.1 percent and 3.9 percent respectively.
TCS continues to steer forward with a strategic focus on technology, innovation, and client-centric solutions, driving its growth trajectory in a dynamic market environment.
TCS ranks within the top 10 IT service providers in terms of market share. Its overall rating remains positive, with its greatest strength being its customer-centricity. TCS emphasizes building enduring and trustworthy relationships with its clients. Additionally, it showcases adaptability in its partnerships, demonstrating fairness in negotiations during challenging times, through change requests and contract renewals, Biswajit Maity, Sr Principal Analyst, Gartner, said.
Also, TCS continues to make investments in its people and new technologies. The collective impact of these qualities has earned TCS significant trust, and its QoQ growth and is a testament to this. One thing to keep in mind is that labor inflation in India and higher than usual attrition levels for TCS are now driving up delivery costs. One objective of TCS’s investment in automation is to retain its price competitiveness, Biswajit Maity said.
Gartner’s 2Q23 forecast for worldwide IT spending has been revised down by 1.2 percent from 5.5 percent to 4.3 percent. Consumers’ spending expectations are slightly lower due to inflation rates remaining above expectations.
Gartner projected that Global IT spending will surpass $4.6 trillion in 2023 and achieve a 6.3 percent compound annual growth rate (CAGR) from 2022 through 2027. The confidence in IT investments will continue as CIOs will continue to invest in their multi-year digital transformation initiatives. The extra due diligence from customers and resulting delays in contract signing will not affect overall IT spending.