TCS reports flat growth, offers dividend of ₹6 per share

Tata Consultancy Services fourth quarter results announced IANS

  • Tata Consultancy Services (TCS) has announced dividend of ₹6 per equity share of ₹1 each of the company.
  • Its net profits saw a 3.6% decrease and revenues are down 2.54%.
  • The company plans to honour all 40,000 offers made this year but existing employees will not be getting any salary increments.
India’s IT sector is buckling under the Coronavirus pandemic since it’s not just India’s lockdown that’s bearing down on them — but also a lack of demand from their global clients. India’s largest IT company, Tata Consultancy Services (TCS) is no exception.

Despite the pressures of the global economy, the company is going to giving out dividends of ₹6 per equity share of ₹l each of the company. Last quarter, the TCS board has declared a third interim dividend of ₹5 per equity share of ₹1 each of the company.

"The storm is going to get a lot worse before it gets better," said Rajesh Gopinathan, CEO and MD of TCS.

Its net profits for the fourth quarter saw a 3.6% decrease from $1.138 billion to $1.096.

TCS’ dollar revenues, also fell by 2.54% to $5.4 billion from $5.6 billion in the third quarter.

The company’s results reflect the revenue loss from missed billings due to lockdowns in India, the US and Europe. Like with Wipro — who announced its final quarter’s results yesterday — the banking, finance and insurance (BFSI) sector is a large business vertical.

The US Federal Reserve's liquidity injection and the fall in rupee value were only able to partially cushion the loss. Exporters like TCS earn in dollars, and when the value of the dollar increases, and the rupee weakens, the same revenue earned is more in rupee terms.

New hires will still be onboarded
In comparison, Wipro — who announced its final quarter’s results yesterday — saw a 5.3% fall in net profits due to the impact of Coronavirus and did not issue guidance for the coming quarter.

According to its chief human resources officer Saurabh Govil, Wipro may also ask employees to go on leave or let them go if depending on how the situation plays out. TCS, on the other hand, is not letting go of its 40,000 new hires.

"Every offer that we have made will be honored," said TCS' Gopinathan. The full impact of the Coronavirus on TCS will likely be seen in the coming quarter according to him.

For exisiting employees, promotions will continue but no salary increments will be introduced for now.

See also:
Wipro's hiring will be slower in the coming months and current employees may be asked to go on leave without pay

Wipro takes $14-16 million Covid-19 hit in Q4 skipping guidance and increments

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