• Wednesday, May 29, 2024

Business

AI, cloud contracts push TCS profits up

K Krithivasan

By: Pramod Thomas

INDIAN IT giant Tata Consultancy Services (TCS) saw March quarter profits above analyst expectations, with growth in cloud computing and artificial intelligence projects, the company reported Friday (12).

The Mumbai-headquartered firm earns more than 80 per cent of its revenue from Western markets.

Net income rose to $1.5 billion (£1.2bn) in the fourth quarter, an increase of more than eight per cent on-year that defied market expectations of a slowdown in the sector.

TCS chief executive K Krithivasan said the company had ended the Indian financial year to March 31 “with the highest ever order book and a 26 per cent operating margin”.

The results were “validating the robustness of our business model and execution excellence”, he said in a statement.

Consolidated revenue in the March quarter rose by 2.3 per cent to $7.36bn (£5.9bn).

“Clients are prioritising initiatives that reduce cost, increase business agility, improve security posture and resilience,” the company said.

“AI, cloud, enterprise solutions… and cyber security led the growth this quarter,” it said.

Chief operating officer N Ganapathy attributed the results to “broad based deal wins across industries and geographies”, particularly “the mega deal win at Aviva” — the UK insurer and existing TCS client which announced a 15-year expansion of their partnership.

The company also reported a dip in its staff strength by close to 2,000 people during the reporting quarter. Its overall workforce stood at 601,546 as of March 31, 2024. The attrition in IT services dropped to 12.5 per cent from 13.3 per cent in the quarter-ago period.

The group’s Indian rivals Infosys and Wipro are scheduled to report their results next week.

(Agencies)

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