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.
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%.
Here’s how TCS performed across different sectors
|Sector||Growth in Dec 2020 quarter|
|Communications and Media||5.5%|
|Life Sciences and Healthcare||5.2%|
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.
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.
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