TCS says this was their strongest autumn in nine years thanks to COVID

• Tata Consultancy Services announced its December quarter results, posting double-digit growth of 16.4% in its overall profit.
• This is the strongest December quarter for TCS in nine years, thanks to COVID-induced acceleration in tech adoption.
• TCS also announced an interim dividend of ₹6 per share, adding to the ₹12 per share dividend announced in the September quarter.

Tata Consultancy Services (TCS) has beaten market expectations and delivered another winning performance in the quarter ending December 2020. It reported its strongest third quarter results in nine years, thanks to COVID-induced acceleration in tech adoption.

The overall profit of the company stood at ₹8,701 crore, up by 16.4% over the second quarter. The company has clocked in growth across verticals and geographies with strong deal wins as clients step up their spending on cloud services.

TCS, India’s largest IT services company, reported a revenue growth of 4.7% over the previous quarter. Its consolidated revenues stood at ₹42,015 crore, growing by 5.4% when compared to the same period last year.

“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,” said Rajesh Gopinathan, Chief Executive Officer and Managing Director, commenting on the company’s performance this quarter.

The company’s margins grew by 40 basis points, closing at 26.6% for the quarter, this despite the wage hikes rolled out in October. 100 basis points make 1%.

Its attrition rate stood at 7.6%, which is its lowest so far. The company added 15,721 new employees in the last three months.

Here’s how TCS performed across different sectors


Source: TCS

Note: Sequential growth

“From our perspective, we believe this momentum is very strong, we believe this will continue in FY21 and FY22,” Gopinathan further added, commenting on the earnings surprise.

The company’s shares continued their upward rally in trade today, closing nearly 3% higher in anticipation of strong earnings. The company’s market capitalization is closing in on the ₹12 lakh crore mark.

And there’s a lot more to come, according to a December report by Edelweiss Research. The firm believes there’s more value for TCS in the coming year, with a target price of ₹4,000 - an upside of 28% from the closing price as on January 8, 2021.

TCS has also declared an interim dividend of ₹6 per share.

SEE ALSO:

One research firm says shares of Infosys, HCL Tech, and TCS may see another surge — here's why

TCS, Infosys, HCL Tech and others will gain from Microsoft, Amazon and Google spending more on technology

Infosys, TCS and Wipro are the top newsmakers of 2020 in the IT sector, says report