scorecardTCS Q4 constant currency revenue growth hits a 11-quarter low
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TCS Q4 constant currency revenue growth hits a 11-quarter low

TCS Q4 constant currency revenue growth hits a 11-quarter low
Business6 min read
  • TCS’ net profit for FY23 stood at ₹42,147 crore, registering an increase of 10%.
  • For the fourth quarter, TCS posted a net profit of ₹11,392 crore, registering a 14.8% YoY increase.
  • TCS CEO Rajesh Gopinathan said that the recovery expected in the North American market had not yet materialised.
IT major Tata Consultancy Services (TCS) on Wednesday reported a 13.7% growth in its revenue in constant currency terms to $27.9 billion for FY23 as compared to the year before. Its revenue in constant currency terms came in at $7.2 billion in Q4, making it the slowest growth in 11 quarters.

TCS CEO Rajesh Gopinathan said in a post-earnings press conference that the company is seeing stress in one of its largest markets, North America. The recovery that the company had expected had not yet materialised.

“The North American market has turned out to be more negative or slower than we had expected. Other markets have performed on expected lines,” he said.

The company’s net profit for FY23 stood at ₹42,147 crore, registering an increase of 10% over last year. Its operating margin came in at 24.1%, contracting by 120 basis points from 25.3% in FY22, missing analyst expectations of 24.8% for FY23. Net margin stood at 18.7% in FY23, compared to 20% in FY22.

“It is very satisfying to look back at our strong growth in FY 2023, on top of the mid-teen growth in the prior year. The strength of our order book demonstrates the resilience of demand for our services and gives us visibility for growth in the medium term,” said Gopinathan.

For the fourth quarter, TCS’ net profit came in at ₹11,392 crore, registering an increase of 14.8% on a year-on-year basis.

While the March quarter is traditionally a weak one for IT companies, TCS reported a 10.7% year-on-year increase in its revenue in constant currency terms to $7.2 billion in Q4, in line with analyst expectations.

“During Q4 and through the year, we successfully delivered transformation programmes of varying size and scale. Cloud and Data continue to generate huge demand both internally from a talent perspective and externally from a solutions point of view,” said N Ganapathy Subramaniam, COO and ED of TCS.

North America and UK, two of TCS’ primary markets, led with a year-on-year growth of 15.3% and 15%, respectively, in constant currency terms. These two markets together constitute over two-thirds of the company’s revenue and nearly three-fourths of its profit.

However, going ahead analysts see pain in the IT sector as a whole thanks to the banking crisis and worries regarding growth in the sector’s primary markets of US and Europe.

“The gap between leaders and laggards will widen in FY2024. Among Tier 1, TCS and Infosys offer a full suite of services, robust delivery and excellence in multiple digital competencies,” said a report by Kotak Institutional Equities.

Analysts at ICICI Securities expect near-term weakness to spill over into FY24, resulting in a 5% reduction in earnings per share in the new financial year.

Incoming CEO Krithivasan to take over in June

Incoming TCS CEO Krithi Krithivasan is all set to take over the reins of the company from current CEO Gopinathan on June 1, 2023.

Talking about the CEO transition, Gopinathan said, “Krithi and I are working closely to ensure that the leadership transition over the next few months is smooth and seamless to all our stakeholders, and that TCS is well positioned to capture the opportunities ahead.”

In March this year, TCS announced Gopinathan would be stepping down as the company’s CEO after six years at the top. He will stay on till September 15, 2023 to help Krithivasan transition into his new role. Krithivasan was the global head of the banking, financial services and insurance (BFSI) business of the company.

TCS’ FY23 at a glance:




Q4 FY23

Q4 FY22


₹2,25,458 crore

₹1,91,754 crore

₹59,162 crore

₹50,591 crore

Net profit

₹42,147 crore

₹38,327 crore

₹11,392 crore

₹9,926 crore

Net margin





Source: Company reports

TCS reported that large deals hit an all-time high in Q4, touching a total contract value of $10 billion. For the full FY23, the company reported a TCV of $34.1 billion.


Result (FY23)



₹22,345 crore



₹5,842 crore



₹9,636 crore



₹10,667 crore


Life Sciences

₹6,894 crore



₹3,875 crore


Source: Company reports

Attrition eases, headcount sees a marginal increase

TCS’ attrition rates came down to 20.1% in Q4 from 21.3% in the previous quarter. It reported a marginal increase in its headcount by 821 during the quarter to 6,14,795 employees.

“We are honouring all job offers, and have added 22,600 employees on a net basis in FY23,” said Milind Lakkad, the company’s chief HR officer, adding that over 44,000 freshers were onboarded during the year.


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