BENGALURU: TCS ended financial year 2021-22 on a strong note with record orders. The country’s largest tech company by market cap saw robust demand for IT services in its mainstay North America market, broad-based growth in verticals, including a smart recovery in retail and manufacturing.
Its revenue in constant currency grew 14.3% in Q4 and 15.4% in the full year, a sharp pickup from the lows of the previous year, when Covid hit global demand. Dollar revenue grew 15.9% to $25.7 billion in FY22, adding $3.5 billion in incremental revenue, its highest ever.
“It’s a very strong Q4 to end the year, and a year that has been marked by steady recovery. Over the course of the last few quarters, North America growth has been the primary story. We have an 18.7% year-on-year constant currency growth in the quarter for the region,” TCS MD & CEO Rajesh Gopinathan said. “Retail, which bore the brunt of the early stages of the pandemic, has continued to accelerate through the last many quarters and has ended the year at 22.1% growth, crossing $1-billion revenue for the first time in a quarter. Manufacturing rebounded nicely too,” he said.
Retail and CPG (consumer packaged goods) grew 20.6%, and manufacturing grew 19.4%. BFSI, the largest vertical, also grew faster than the company average. “Banks across the globe are doing well and we have got some fantastic deal wins,” said COO N G Subramaniam.
TCS had the highest-ever order book of $11.3 billion in the March quarter. Gopinathan said the deals signed include a couple of $1-billion ones. He said the company is happy with the way they executed the rebound post-pandemic. “We are also happy about steps taken in setting ourselves up for the opportunity ahead, including investments in cloud, digital and security and other services. These are all paying off,” he said. The board has proposed a dividend of Rs 22 per share.
Moshe Katri, MD of Wedbush Securities, said, “Management’s preliminary commentary suggests no change in demand trends despite the ongoing political instability in eastern Europe as well as recent upticks in interest rates and oil prices.”
TCS added over 1 lakh employees during the year, taking total headcount to 5.9 lakh. It plans to add 40,000 people in the 2023 fiscal. Attrition, however, continues to rise. It went up to 17.4% in IT services in Q4, up from 15.3% in Q3. “Attrition on a percentage basis is starting to flatten, and it will flatten further,” Gopinathan said. The salary hike this year is expected to be similar to last year (6-8%). Operating margin was down 180 basis points (100bps = 1 percentage point) to 25% on a year-on-year basis due to higher subcontracting expenses and investments into measures to rein in attrition. TCS CFO Samir Seksaria said the company aspires to be in the 26-28% margin band.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *