Global software major Tata Consultancy Services (TCS) on Friday reported a consolidated net profit of Rs 8,118 crore for the third quarter of fiscal 2019-20, registering a mere 0.16% annual growth from Rs 8,105 crore net profit clocked in the same quarter of last year.
In a regulatory filing on the BSE, TCS said consolidated revenue for the quarter (Q3) under review, however, grew 6.7% to Rs 39,854 crore from Rs 37,338 crore in the same period a year ago.
In constant currency, the company's Q3 revenue grew by 6.8% year-on-year while operating margin was at 25%.
On sequential basis, net profit rose by 0.94% to Rs 8,118 crore from Rs 8,042 crore recorded in Q2 2019-20.
"We saw the sectoral trends of the first half of the year continue to play out in the third quarter," said TCS Chief Executive and Managing Director Rajesh Gopinathan in a statement.
Under the category of revenue by industry practice, banking, financial services and insurance (BFSI) continued to be the leader in Q3 with a revenue of Rs 15,483 crore, followed by manufacturing at Rs 4,171 crore, retail and consumer business at Rs 6,709 crore, communication, media and technology at Rs 6,608 crore and others at Rs 6,883 crore.
In Q3, the life sciences and healthcare vertical outperformed, registering 17% growth year-on-year while manufacturing and communications and media grew by 9.2% and 9.5%, respectively.
Among the geographies TCS operates, Europe grew by 16% year-on-year.
"Our participation in the growth and transformation spends of our customers is most evident in our sustained success in continental Europe where our revenues have more than doubled in the last five years," said Gopinathan.
In other geographies in Q3, Middle East and Africa registered a growth of 10.8%, UK 7.5%, North America 4.1%, Asia Pacific 5.7%, India 6.4% and Latin America 6.2%.
In the quarter under review, consulting and services integration saw strong growth, led by enterprise transformation services, mergers and acquisitions, divestiture and supply chain as a service.
Under digital transformation services, MFDM framework which integrates automation, analytics and AI played a key role in several transformation deals.
Enterprise intelligent automation, cyber security, IoT and enterprise application services led growth under digital transformation services, TCS said.
In cognitive business operations, TCS witnessed strong growth in managed hybrid cloud services.
"TCS' new operating models leveraging service reliability engineering, AIOps powered by ignio and Agile are seeing strong traction. Q3 order book was the strongest in the last several quarters," said the company.
Among the multiple deals TCS won in Q3, projects came from Walgreen Boots Alliance, Petco, IAG Tech, Bayer, CSL Behring, Apriv PLC and several others.
The Tata Group company hired 22,390 employees in the first nine months of the fiscal 2019-20 even as it onboarded 93% of 30,000 freshers in various projects in the first six months of 2019-20.
"Having onboarded over 30,000 trainees in the first half of the year, we worked on driving up utilisation in Q3 and had good outcomes. Our client metrics were also very good, with additions across most revenue buckets," said N. Ganapathy Subramaniam, chief operating officer, TCS.
Subrmaniam said TCS' larger core transformation engagements are progressing well, crossing major milestones at M&G Prudential and Scottish Windows by migrating hundreds of thousands of policies from legacy systems.
The company trained 3.3 lakh employees in digital technologies and 4 lakh employees in Agile methods.
With an employee base of 4,46,675 people, TCS attrition level at the end of Q3 is 12.2%, the company said.
TCS declared third interim dividend of Rs 5 per equity share of Re 1 each of the company.
On Friday, TCS shares closed at Rs 2,218.05 a piece, dropping by 0.9%.