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Ventura Wealth Clients
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Tata Consultancy Services (TCS), a leading global IT services company, has once again set the tone for the technology sector's earnings season with its Q4 FY24 financial results announced on April 12. Let's delve into the details of the report and dissect the key highlights.

1. Financial Performance

TCS showcased a robust performance in Q4 FY24, reporting a 9.1 percent rise in consolidated net profit at Rs 12,434 crore compared to the same period last year. This growth underscores the company's resilience and ability to navigate through global macroeconomic uncertainties. The consolidated revenue from operations stood at ₹61,237 crore, marking a 3.5 percent year-on-year increase and a 1.1 percent quarter-on-quarter rise. Notably, the company witnessed the highest-ever order book during the quarter, reflecting strong demand for its services despite the challenging environment.

2. Operational Metrics

Operating margin and net margin witnessed healthy expansions, with a 150 basis points increase YoY in operating margin to 26 percent and a 100 basis points expansion YoY in net margin to 20.3 percent. In constant currency terms, the 'regional markets & others' domain emerged as the top performer, registering a 26 percent YoY growth. Additionally, domains like manufacturing and energy, resources, and utilities exhibited substantial growth, while sectors like BFSI, communication & media, and technology & services faced some challenges.

3. Key Market Insights

Despite some setbacks in North America and Continental Europe, other key markets displayed positive growth trends. The UK market witnessed a notable 6.2 percent YoY growth in constant currency terms, underscoring TCS's diversified geographic footprint. Furthermore, the Indian and MEA markets showcased robust growth rates of 37.9 percent and 10.7 percent YoY respectively in constant currency terms, indicating the company's ability to capitalise on opportunities in emerging markets.

4. Human Resources Dynamics

TCS's workforce stood at an impressive 6,01,546 employees as of March 31, 2024, highlighting the company's stature as a major employer. Noteworthy is the diversity within its workforce, with 35.6 percent representation of women and employees hailing from 152 nationalities. The company's emphasis on talent retention is evident from its IT services' attrition rate of 12.5 percent for the last twelve months. Moreover, TCS's commitment to employee welfare is reflected in its annual increments, with top performers receiving double-digit hikes, contributing to a vibrant work culture and elevated morale.

5. Research and Innovation

TCS continues to prioritise research and innovation, as evidenced by its robust patent portfolio. As of March 31, 2024, the company had applied for 8,040 patents, with 188 applications filed during the quarter. Additionally, TCS has been granted a total of 3,919 patents, including 461 patents granted during the same period. This emphasis on intellectual property underscores TCS's commitment to driving technological advancements and staying at the forefront of innovation.

Conclusion

In conclusion, TCS's Q4 FY24 earnings report reflects its resilience, agility, and strategic foresight in navigating through dynamic market conditions. With a strong financial performance, operational excellence, diverse market presence, and commitment to innovation and talent development, TCS is well-positioned to capitalise on emerging opportunities and drive sustainable growth in the evolving digital landscape.

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