Software major Tata Consultancy Services (TCS) on Wednesday opened the earnings season for the March quarter with a 14.8 per cent growth in net income to Rs 11,392 crore against Rs 9,926 crore in the year-ago period.
The largest software company by revenue and market value said its revenue rose 16.9 per cent to Rs 59,162 crore in the March 2023 quarter from Rs 50,591 crore a year ago.
For the full year, the Tata Group flagship reported a 17.6 per cent year-on-year rise in revenue to Rs 2,25,458 crore and earned a net income of Rs 42,147 crore, which was 10 per cent more than it booked in the 12 trailing months.
The company, which abruptly announced the departure of the incumbent chief executive and managing director Rajesh Gopinathan last month -- four years before his second five-year term to end, said chief executive-designate K Krithivasan will assume charge from June 1, which is a full one-month ahead of the previous announcement.
The company saw improvement in its operating margins at 24.5 per cent, up from 24.1 per cent a year ago, and net margin increased to 19.3 per cent in the quarter against 18.7 per cent.
TCS -- the cash cow for the Tata Group with more than 85 per cent of the group's net income -- said its free cash flow stood at Rs 41,440 crore, which is 104.1 per cent of the net income, and declared a final dividend of Rs 24 per share.
This will take the annual payout to Rs 45,602 crore.
In a statement, TCS said despite the troubles in the North American banking sector, the region continues to lead revenue growth with 15.3 per cent more than what it did last year, followed by England, which reported 15 per cent more growth year-on-year and home market chipped in with 14.6 per cent higher revenue in the reporting period.
TCS, the segment leader when it comes to employment as also the largest private sector employer in the country, has added a net of 22,600 employees during the year, of which 821 were in the reporting period.
This has taken the total number of its payrolls to 614,795 from 150 nationalities and women constituting 35.7 per cent of the workforce.
The software major said its attrition rate stood at 20.1 per cent, marginally better than the previous quarters.
During FY23, the company's order book stood at $34.1 billion, of which Q4 was $10 billion, led by an all-time high number of large deals.
The company has 60 clients in the $100 million-plus band, 133 in the $50 million-plus band, 291 in the $20 million-plus bracket and 461 in the $10 million-plus segment.
"It is very satisfying to look back at our strong growth in FY23, on top of the mid-teen growth in FY22.
“The strength of our order book demonstrates the resilience of demand for our services and gives us the visibility for growth in the medium term," said Rajesh Gopinathan, the outgoing chief executive.
He further said the growth was led by retail and consumer groups with a 13 per cent rise followed by life sciences and healthcare, which logged in 12.3 per cent.
Other verticals grew in the single digits. Technology & services increased by 9.2 per cent, the largest revenue head -- the BFSI sector -- grew at a lower 9.1 per cent, manufacturing rose by 9.1 per cent, and communications & media grew the slowest at 5.3 per cent.
On his departure, a month earlier than initially announced, Gopinathan said, "Krithivasan and I are working closely to ensure that the leadership transition is smooth and seamless to all our stakeholders and that TCS is well positioned to capture the opportunities ahead."
During the reporting period and through the year, cloud and data continued to generate huge demand both internally from a talent perspective and externally from a solutions point of view, said its chief operating officer N Ganapathy Subramaniam.
TCS chief financial officer Samir Seksaria said FY23 was a year of transition, as supply-side challenges abated while pandemic-depressed travel and discretionary spending normalised.
"We navigated this change well, without slowing down our investments in people, research and innovation and intellectual property.
“Our longer-term competitiveness remains intact, giving us industry-leading profitability even as we pursue our growth aspirations."
Amid many software companies like Wipro asking freshers to either delay joining or to take 50 per cent less pay than offered, TCS chief HR officer Milind Lakkad said the company is honouring all job offers and have added 22,600 employees on a net basis in FY23.
"During the year, we on-boarded over 44,000 freshers and our highest-ever number of experienced professionals."
"We've also doubled down on organic talent development, obtaining over 53,000 cloud certifications during the year, bringing the total to over 110,000 employees certified on hyper scaler platforms.
“This places us among the top two partners for the largest cloud providers," he added.
