BFSI hurts TCS, pulls Q3 net down 3.6%

Our Bureau Mumbai | Updated on January 16, 2018 Published on January 11, 2018

Rajesh Gopinathan, CEO & MD of Tata Consultancy Services, announces thecompany’s third-quarter results in Mumbai on Thursday PRASHANT NAKWE

IT bellwether Tata Consultancy Services (TCS) has reported a 3.6 per cent decline in its third-quarter net profit to ₹6,531 crore due to exchange-rate volatility and a dip in spending by banking and financial services and insurance (BFSI) clients.

The company’s revenues rose marginally, by 1.2 per cent, to ₹30,904 crore (₹29,735 crore).

This was the company’s strongest volume growth for the December quarter in three years. During the quarter, the company bagged about 11 large deals, from Rolls Royce, Nielsen and Marks & Spencer, among others.

Read: TCS Q3: Growth slims with every quarter

While it witnessed better-than-expected volume growth from its digital and retail business, the BFSI sector pulled down its overall volumes.

“We wrapped up 2017 with a strong performance in the December quarter, marked by the signing of industry-defining deals, robust client metrics and broad-based demand across industry verticals. As lagging parts of our portfolio turn around, and areas of softness reduce, we are well placed for stronger growth ahead,” said Rajesh Gopinathan, CEO and MD.

TCS is ramping up its digital investments and has signed its first $50-million deal this quarter. Digital revenue now accounts for 22.1 per cent and has grown by nearly 40 per cent over the last year.

“The investments we have been making over the last few years in research and innovation, and in building intellectual property, are giving us a distinct edge ... in winning such large transformational programmes,” Gopinathan said, adding that the focus on digital has helped TCS bag over 150 deals in this space.

The European market continued to lead the company’s strong growth trajectory and will emerge as the second-largest market after the UK next year.

Despite the challenges in the US market over visa and new regulations, the market managed to deliver growth, albeit marginally.

The company saw a 0.2 per cent decline in its attrition rate at 11 per cent and added about 1,600 employees during the quarter. TCS’s total employee count stood at 3.9 lakh.

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Published on January 11, 2018
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