TCS Q4 Results: 9% Profit Growth and Record Order Book

TCS unveils strong Q4 FY24 results with a 9% increase in profits and $42.7 billion in annual orders. Explore the intricate details and future projections.

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Tata Consultancy Services (TCS), India’s leading IT services company, has just released its financial results for the fourth quarter of FY24, marking a significant achievement in its operational history. On April 12, TCS reported a substantial 9.3% year-on-year increase in consolidated net profit, reaching Rs 12,502 crore, up from Rs 11,436 crore in the same quarter last year. This growth in profitability is supported by a rise in quarterly revenue of 3.4%, amounting to Rs 62,394 crore.

TCS Q4 Net Profit
TCS Q4 Net Profit

Q4 FY24 Highlights: TCS on a Steady Ascent

The IT behemoth saw its operating margins expand by 150 basis points to 26%, while net margins improved by 100 basis points to 20.3%. On a sequential quarter basis, the profit after tax showed a robust growth of 12.7%, up from Rs 11,097 crore in the December quarter, with a modest quarter-on-quarter revenue increase of 1.5%.

For the entire fiscal year 2024, TCS achieved a revenue growth of 7.2%, totalling Rs 2,45,315 crore. The annual net profit stood at Rs 46,099 crore, showing a 9% increase year-on-year. The operating margin for the year was noted at 24.6%. Moreover, the Board of TCS recommended a final dividend payout of Rs 28 per share.

Record-breaking Order Book and Deal Wins

Despite a challenging economic backdrop and reduced discretionary spending, TCS reported a record total contract value (TCV) of $13.2 billion for Q4, highlighted by significant multi-year deals with major clients like Aviva, Ramboll, and the Central Bank in the US. For FY24, the total order book surged to a historic high of $42.7 billion, up from $34.1 billion in the previous fiscal year.

Geographic and Sectoral Growth

In FY24, TCS experienced phenomenal growth in India, with a 37.9% increase in constant currency terms, and a decent performance in the UK with a 6.2% growth. The manufacturing sector led the vertical growth with a 9.7% rise in constant currency terms during Q4. However, the BFSI sector, which makes up a substantial portion of TCS's revenue, saw a decline of 3.2%.

Future Outlook

TCS continues to benefit from significant contracts, such as the $1.8-billion deal with BSNL, reflecting in the strong performance in the Indian market. The management’s focus remains on supporting core customer priorities and driving growth across diverse sectors and regions.

N Ganapathy Subramaniam, Chief Operating Officer and Executive Director of TCS, emphasized the robustness of the Q4 performance, noting broad-based deal wins across various industries and geographies. K Krithivasan, CEO and MD of TCS, pointed out the company's resilience in global macro uncertainties, maintaining close relationships with customers and leveraging TCS’s comprehensive portfolio of offerings and innovative capabilities.

In conclusion, TCS's impressive Q4 FY24 results not only demonstrate its financial robustness but also position the company well for sustained growth in the face of global economic challenges.

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