TCS’ Double Digit Growth Further Accelerates in Q3

PRESS RELEASE

 

TCS’ Double Digit Growth Further Accelerates in Q3

  • CY18 $ Revenue at 20.5 Bn; up 10.3%
  • $ Revenue grows +9.7% YoY[1]; Constant currency: +1.8% QoQ and +12.1% YoY,
  • Stellar growth in UK & Europe: +25.1% and +17.6% YoY
  • Industry-leading Digital Growth: +52.7% YoY
  • Net Income up 12.7% YoY

MUMBAI, January 10, 2019: Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading IT services, consulting and business solutions firm reported its consolidated financial results according to Ind AS and IFRS for the period ending December 31, 2018.

Financial Highlights for Quarter Ended December 31, 2018

  • Revenue at $5,250 Mn, +9.7 % YoY
  • Constant Currency revenue growth: +1.8% QoQ and +12.1% YoY
  • Net Income at $1,140 Mn, +12.7% YoY
  • Operating Margin at 25.6%, an expansion of 0.4% YoY
  • Earnings Per Share at $0.3, +15.0% YoY
  • Net Cash from Operations at 107% of Net Income
  • Dividend per share of Rs. 4.00

Record date 18/01/19; Payment date 24/01/19

Business Highlights for Quarter Ended December 31, 2018

  • BFSI growth continues to accelerate: +8.6% YoY (+6.1% YoY in Q2)
  • Digital revenue: 30.1% of total, +52.7% YoY
  • UK and Europe lead growth: +25.1% YoY and +17.6% YoY respectively
  • Continued investment in organic talent development: 292K+ employees trained in digital technologies; 318K+ employees in Agile methods
  • Industry-leading talent retention: IT Services attrition rate at 11.2% LTM

Commenting on the Q3 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said, “We are wrapping up 2018 with a strong revenue growth of 12.1% in the December quarter, which is the highest in 14 quarters, with continued growth acceleration in key verticals and across all geographies. The strong client metrics, industry leading growth in digital services, a very strong order book and deal pipeline are all validations that customers recognize our differentiated capabilities and are picking us for their growth and transformation programs.”

He added, On a secular basis, as large segments of the economy go through churn driven by digital disruption, enterprises are responding with technology-powered strategies – as in algorithmic retailing or connected cars – creating a huge opportunity for services providers like us. Our investments in research and innovation, our deep domain and contextual knowledge, intellectual property and our collaborative approach to co-innovation, have been key to our participation in this opportunity. This quarter, we launched a new brand, TCS Pace™ embodying these capabilities and offering our customers a line of sight to success in a Business 4.0 world.”

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said,“This has been a very satisfactory quarter in terms of revenue growth as well as operating metrics. The investments that we have been making in building newer capabilities and frameworks are starting to bear fruit. Our location independent Agile methodology and Machine First™ approach have been key in helping us advance CEO-level enterprise transformation agendas.”

V Ramakrishnan, Chief Financial Officer, said, “Despite headwinds from the Rupee volatility against various currencies, and the higher cost of doing business in some major markets, our operating margins have been resilient. We remain focused on driving rigor in our operations, generating strong cash flows and steering profitability back to our preferred range, while continuing to invest strongly for future growth.

[1] YoY: Year on Year; QoQ: Quarter on Quarter. All segment growth rates are YoY, and in constant currency unless specified otherwise

IFRS Financial Statements

Unaudited Condensed Consolidated Statements of Comprehensive Income

For the three-month periods ended December 31, 2017, and December 31, 2018

(In millions of $, except per share data)

 

 

 

Three-month period ended

 December 31, 2017

Three-month period ended

 December 31, 2018

 Revenue

4,787

5,250

 Cost of revenue

2,767

3,056

 Gross margin

2,020

2,194

 SG & A expenses

815

849

 Operating income

1,205

1,345

 Other income (expense), net

134

161

 Income before income taxes

1,339

1,506

 Income taxes

325

364

 Income after income taxes

1,014

1,142

 Minority interest

2

2

 Net income

1,012

1,140

 Earnings per share in $

0.26

0.30

 

Unaudited Condensed Consolidated Statements of Financial Position

As of March 31, 2018, and December 31, 2018

(In millions of $)

 

As of March 31, 2018

As of December 31, 2018

Assets

 Property and equipment

1,784

1,642

 Intangible assets and Goodwill

599

569

 Accounts Receivable

3,849

3,920

 Unbilled Revenues

1,063

1,203

 Investments

5,536

4,272

 Cash and Cash equivalents

751

752

 Other current assets

1,385

2,179

 Other non-current assets

1,702

1,194

Total Assets

16,669

15,731

 

 Shareholders' Funds

13,413

12,230

 Long term borrowings

8

7

 Short term borrowings

30

2

 Other current liabilities

2,712

3,030

 Other non-current liabilities

443

398

 Minority Interest

63

64

 Total Liabilities

16,669

15,731

About Tata Consultancy Services Ltd (TCS)

Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for the last fifty years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent Agile delivery model, recognized as a benchmark of excellence in software development.

A part of the Tata group, India's largest multinational business group, TCS has over 417,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $19.09 billion in the fiscal year ended March 31, 2018, and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India. TCS' proactive stance on climate change and award winning work with communities across the world have earned it a place in leading sustainability indices such as the Dow Jones Sustainability Index (DJSI), MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit us at www.tcs.com.

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