TCS has a good fourth quarter, better than Infosys

BENGALURU: TCS’ revenue growth in the fourth quarter was one of its best in recent times. Revenue rose to nearly $5 billion, a 2 per cent growth sequentially in constant currency (which discounts the impact of cross currency fluctuations) and 11.7 per cent year-on-year growth in reported currency.

The growth was better than that of Infosys (0.6 per cent sequentially in constant currency) and was enabled by good growth from the energy & utility and travel & hospitality units which more than offset tepidness in the banking, financial services and insurance (BFSI) and retail verticals in the US. Incremental revenue in the quarter was $185 million, one of the highest in recent times. Net profit rose 5.6 per cent to just over $1 billion, while operating margin rose to 25.4 per cent, helped by favourable currency movements and improvement in operational efficiency.

The year as a whole was lacklustre, with constant currency growth at just 6.3 per cent, its second successive year of single digit growth and the slowest in nearly seven years. But the good performance in the last quarter and the signing of mega deals worth close to $6 billion in the past few months suggest that the next year will be much better.


“We’re glad to announce we’re back to double digit trajectory on dollar revenue growth,” CEO Rajesh Gopinathan said on Thursday.

While BFSI has been sluggish with 0.4 per cent quarterly sequential growth – the big US banks are spending less – the company was “incrementally” more confident of its growth this fiscal in the segment in North America. “Not much of the stress is left in the system,” Gopinathan added. Retail is expected to do well this year, though numbers there so far have been muted as well. Digital grew 35 per cent in the year to touch more than $4 billion. It now contributes 21 per cent to the top line. Infosys said its digital revenue is 25.5 per cent of the pie, or $2.8 billion. But the two could be measuring digital differently.