Tata Consultancy profit beats estimates as digital revenues jump

Jeannie Matthews
January 12, 2018

Tata Consultancy Services (TCS), the country's largest IT software exporter, has reported a 1.3 per cent increase in its net profit for the October-December 2017-18 quarter, at Rs6,531 crore ($1.01 billion), on a 3.9-per cent increase in revenues to Rs30,904 crore ($4.79 billion).

TCS posted consolidated net profit of Rs 6,545 crore, down by 3.94% from Rs 6,814 crore in the corresponding period of the previous year.

"We signed our first $50 million plus deal in digital crossing an important milestone in the mainstreaming of digital technologies".

Sales in dollar terms, the currency in which India's IT sector earns much of its revenue, rose 1 percent to $4,787 million from $4,739 million for the September quarter.

Gopinath said smaller industries like energy, utilities and travel and hospitality grew at a "scorching pace" with a 20-25% YoY growth.

The retailer has announced a new "technology transformation plan" and struck an agreement with Indian IT giant Tata Consulting Service, which will become the retailer's main technology partner.

Gopinath said continental Europe, which grew 2.6% in CC, was poised to become the second largest market after the United States next year.

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The Mumbai-based tech firm's volume growth was the highest in the last three years at 1.6% last quarter, which is generally considered weak.

That also reflects the mere 1,600 net additions to the company's workforce, during the quarter, which took the total to 390,880 employees.

The contract, which entails transforming Transamerica's United States insurance and annuity business lines, comes close on the heels of a mega deal TCS had clinched from television rating measurement firm Nielsen. "We have invested heavily in our insurance digital platform, TCS BaNCS, and our extensive USA capabilities, and are proud to partner with Transamerica in its ongoing transformation and welcome the transitioning employees to promising new careers at TCS".

"We have invested heavily in our insurance digital platform, TCS BaNCS, and our extensive USA capabilities, and are proud to partner with Transamerica in its ongoing transformation and welcome the transitioning employees to promising new careers at TCS", TCS CEO and MD Rajesh Gopinathan said.

The shares also quoted a high of Rs 2,820.10 and a low of Rs 2,781.90 during the intra-trading sessions on the BSE.

Unveiled as part of the company's five-year transformation plan, the move is designed to create a more agile, faster and commercial technology function that will work with the business to deliver growth.

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