Tata Consultancy Services fourth-quarter profit beats estimates

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Third-quarter revenue in rupee terms rose 1.2% to Rs 30,904 crore from the preceding three months in Q3.

Net margin for Q4 at Rs 6,904 crore ($1.07 billion) was 21.5 per cent of revenue, while it was 21 per cent of the revenue for the fiscal at Rs 25,826 crore.

Its EBIT or operating profit increased to Rs 8,147 crore, meeting estimates, led by 20 basis points increase in its operating margin at 25.4 per cent.

The software services exporter said the board of directors recommended bonus issue of equity shares in the ratio of one share of Re 1 each for every one share of Re 1 each held by shareholders as on the record date, subject to the approval of the shareholders.

TCS, India's most valuable listed company with a market capitalisation of about $92 billion and part of salt-to-software conglomerate Tata group, reported 320.75 billion rupees as income from operations, a rise of 8.2 percent from a year ago.

Shares gained one percent ahead of results in a broader Mumbai market that ended 0.37 percent higher. With cross-currency tailwinds of 110 basis points, it expects dollar revenue growth of 3.3 per cent QoQ.

Western BFSI clients account for TCS' biggest revenue stream, but their low spending on technology has led to sluggish growth in the segment.

TCS has focused on internal talent development at scale, making large investments in a digital learning platform that empowers employees to acquire new skills and stay relevant at a time of vast technology change, it said.

Chief Financial Officer V. Ramakrishnan said the margins were expected to remain in a stable range with revenue growth improving and digital business scaling up in the fiscal under review.

TCS has given average 2-6 per cent wage hikes for 2018-19, effective April 1. "The multiple mega-deals that we won this year are evidence that TCS is their preferred partner in such strategically important initiatives".

At the end of March 2018, TCS had 3,94,998 employees, and an attrition rate of 11 percent in IT services. At an overall level, the focus on training resulted in over 5.6 million learning days in FY 18, over 247,000 employees getting trained on digital technologies, and 208,000 employees trained on Agile methodologies.

TCS said on Thursday, revenue from its banking, financial services and insurance business, the company's biggest revenue stream, rose five percent to 124.30 billion rupees ($1.89 billion). The IT services attrition rate (LTM) fell by 0.1 per cent in Q4 to 11 per cent, while the total attrition rate (including BPS) fell to 11.8 per cent.

The volume growth for the year was at 7.6 percent & revenue growth in constant currency was 6.7 percent.

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