TCS Q4 net vaults 64% to Rs6,341 cr; annual revenues top Rs1,00,000 cr

Tata Consultancy Services (TCS), India's leading IT services, consulting and business solutions firm, has reported a consolidated net profit if Rs6,341 crore for the last quarter of the financial year ended 31 March 2016, a 64.4 per cent year-on-year increase from Rs3,858 crore in the year-ago period and a 3.8 per cent gain from the previous quarter.

Fourth quarter 2015-16 revenues increased 17.5 per cent year-on-year to Rs28,449 crore and 4 per cent quarter-over-quarter on the back of robust growth in sales volumes, TCS said in a release.

In dollar terms, the fourth quarter revenues stood at $4.2 billion, up 7.9 per cent YoY and 1.5 per cent sequentially. In constant currency terms, revenues were up 2.1 per cent. Net profit at $938 million marked an increase of 50.9 per cent YoY and 1.3 per cent sequentially.

The fourth quarter saw broad-based growth with the core portfolio performing strongly led by BFSI (3.2 percent QoQ), manufacturing (3.9 percent QoQ) and retail (2.1 percent QoQ) in constant currency terms.

Revenues from the digital space accounted for about 15.5 percent of the fourth quarter revenues.

The company, however, is facing new challenges in the US, its biggest market, amid tighter visa rules, the impact of currency moves and a near $1 billion fine in an intellectual-property infringement case that could wipe out the entire profit for the fourth quarter.

TCS reported a 23.2 per cent year-on-year growth in its annual net profit at Rs24,215 crore while a annual FY16 revenues stood at Rs108,646 crore, up 14.8 per cent.

In dollar terms, net profit stood at $3.69 billion, up 14.8 per cent YoY, while operating profit increased by 17.6 per cent YoY to $4.38 billion.

Annual revenues of India's largest IT software services company by sales rose 7.1 per cent YoY and 11.9 per cent in constant currency terms to $16.54 billion.

For FY16, growth was led by BFSI (14.8 per cent), life sciences (20.6 per cent), travel and hospitality (17 per cent) and manufacturing (15 per cent) in constant currency terms.

The company proposed a final dividend of Rs27 per share, taking the total dividend to Rs43.5 per share for 2015-16.

TCS is banking on its digital and cloud services and an expanding customer base to drive growth.

''Our core portfolio performed strongly in a seasonally weak 4th quarter driven by strong volumes led by growth in BFSI, retail and manufacturing sectors. This gives us good momentum going into the new financial year. Our investments in building high impact digital platforms is paying off, resulting in over $2.3 billion in digital revenues,'' N Chandrasekaran, CEO and MD said. 

''We are building the right talent pool by training more than 120,000 TCSers in FY16 in over 400 new digital technologies to help our customers drive adoption of digital in their enterprise,'' he added

TCS, he said, is now focusing on developing 'digital' talent and launch of new products in emerging areas leveraging the Internet of Things, automation and machine learning.

Besides, he said, the company is also looking to intensifying social initiatives to bring the benefits of technology to the community.

''In FY16, we have balanced our focus on delivering an industry leading financial performance with our ongoing investment programme designed to capture evolving digital demand. We have invested over $250 million to support organic growth in our digital businesses and in new markets, while maintaining our profitability within our desired range and generated strong operating cash flows as well,'' Rajesh Gopinathan, chief financial officer, said.

In terms of key markets, growth in Q4 was led by Europe (3.6 per cent QoQ) and North America (2.4 per cent QoQ) in constant currency.

For FY16, revenue from North America grew by 10.8 per cent, Europe grew by 12.9 per cent, UK by 8.3 per cent in constant currency.

India crossed $1-billion milestone in annual revenues while overall revenues from new growth markets stood at $ 3.3 billion in FY16.

During the quarter, TCS reported addition of new customer, including a large UK bank, a major commercial insurer, etc.

In FY16, TCS said its digital revenues grew 52.2 per cent due to faster adoption of digital solutions. TCS said it captured significant customer opportunities with 15.5 per cent of total revenues coming from digital in Q4 led by analytics and AI, cloud and mobility and channels.