Tata Consultancy Services saw its net profit increase by 7.2% year-on-year to Rs 8,701 crore for the third quarter of FY21, ending December 31, 2020. The IT services major said it was the strongest third quarter growth in nine years, with revenue coming in at Rs 42,015 crore, up 5.4% compared to the same period last year.
TCS also saw its lowest-ever employee attrition rate of 7.6%. The company has 4,69,261 employees, of whom 15,721 were added this quarter. Women make up 36.4% of the workforce. Employee costs went up from Rs 21,622 crore in the same quarter last year to Rs 23,431 crore this quarter.
It also added that with this quarter, TCS returns to positive year-on-year growth, at 0.4% at constant currency. Its operating margin was up 0.4% quarter-on-quarter, and 1.6% year-on-year. Revenue was up 4.1% from last quarter, and 0.4% YoY in constant currency terms.
The manufacturing vertical showed maximum sequential growth for TCS at 7.1%, followed by communications and media at 5.5%, life sciences and healthcare at 5.2%, retail and consumer packaged goods at 3.1%, and banking, financial services and insurance (BFSI) at 2%.
â€śOn a year on year, constant currency basis, Life Sciences and Healthcare continued to grow in double digits at 18.2%. BFSI (+2.4%) and Technology & Services (+2.4%) also moved into positive territory,â€ť TCS said.
In terms of geographies in sequential growth, India saw highest growth of 18.1%, followed by North America by 3.3%, UK by 4.5%, Continental Europe by 2.5%, Asia Pacific by 2.6%, Middle East and Africa by 6.7% andL Latin America by 3.1%
Chief Executive Officer Rajesh Gopinathan said, â€śGrowing demand for core transformation services and strong revenue conversion from earlier deals have driven a powerful momentum that helped us overcome seasonal headwinds and post one of our best performances in a December quarter. We are entering the new year on an optimistic note, our market position stronger than ever before, and our confidence reinforced by the continued strength in our order book and deal pipeline.â€ť
Chief Operating Officer N Ganapathy Subramanian said the companyâ€™s Q3 growth was a satisfactory outcome. â€śIt is a strong endorsement of our resilience, way of working and the relative competitiveness of our products and services,â€ť he said.
â€śAll these augur well to progress our 25x25 future of work vision,â€ť he said. The TCS 25x25 model is a system where the company is looking at only 25% of its workforce working out of its offices by 2025, and any given person will need to spend only 25% of their time at the office.
V Ramakrishnan, Chief Financial Officer of TCS said, "Strong growth across all our verticals, and operational benefits from our SBWS model allowed us to post the highest operating margin in the last five years, even after rolling out a salary increase this quarter. We also had an a/I-time high cash conversion in Q3.â€ť