N Chandrasekaran’s last quarter as the CEO of India’s largest software exporter TCS turned out to be better than estimated with the company reporting a 10.9 per cent growth in net profit for the third quarter ended December 31, growing to ₹6,778 crore from ₹6,110 crore in the same period last year due to rapid growth in digital revenues.

Chandrasekaran acknowledged possible headwinds that may arise due to restrictions on H-1B work visas in the US but said TCS is well prepared to handle those issues.

A new bill in the US seeks to raise salary benchmark for H-1B visa holders from $60,000 to a minimum of $100,000 while also restricting the number of H-1B visas given out. Indian IT companies are the largest beneficiaries of H-1B visas.

“In 2015, we decided that we have to operate in a visa constraint regime. So from 2015 when we used to apply for 14,000 visas, we applied for only 4,000 visas last year,” Chandrasekaran said. “About one third of those are granted. We have also been able to execute by making changes to our business model.

“We believe that we are preparing ourselves for a headwind should it arise. On the cost side, we have expats, subcontractors and local hires in US. We are aligning our cost structures for that mix and leveraging our nearshore centres and global centres.”

Revenues up 8.7% Revenue of Tata Consultancy Services was up 8.7 per cent at ₹29,735 crore in the third quarter of 2016-17, from ₹27,364 crore in the year-ago period.

Chandrasekaran said there were significant headwinds in the last few quarters, including those in Japan, LATAM and Diligenta unit in the UK but the company has moved past all of them.

TCS’ digital revenues grew 6.6 per cent over the sequential quarter while growing as much as 30 per cent over the same quarter last year.

The company managed to crack nine deals in the quarter including three in banking and two in retail although $100 million + deals remained out of sight.

Currency impact Chandrasekaran said currency fluctuations were the major reason for not seeing deals larger than $100 million in the quarter.

The total employee strength at the end of Q3 was 3,78,497 on a consolidated basis with gross addition of 18,362 and net addition of 6,978 employees. The total attrition rate further fell to 11.3 per cent in IT services and was at 12.2 per cent, including BPS.

During the quarter, growth was led by Energy & Utilities (up 5.8 per cent sequentially), Hi-Tech (up 2.6 per cent sequentially), BFSI (up 2.1 per cent sequentially), Manufacturing (up 2.1 per cent sequentially) and Retail (up 1.9 per cent sequentially) in constant currency.

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