InvestorQ : How were the TCS results announced late on Monday evening for the fourth quarter?
Dia Deshpande made post

How were the TCS results announced late on Monday evening for the fourth quarter?

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swati Bakhda answered.
1 month ago
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For the fourth quarter ended Mar-22, TCS reported 15.76% growth in sales at Rs.50,591 crore. This is the first time that TCS scaled total revenues of over Rs.50,000 crore in a single quarter. BFSI contributed the chunk of Rs.19,532 crore, CMT Rs.8,475 crore and Retail Rs.8,209 crore to the top line of TCS. The order book was at a record TCV of $11.3 billion in Q4 and $34.6 billion for the full year. FY22 revenues stood at Rs.191,754 crore, up 16.8%.

TCS Ltd

Rs in Crore

Mar-22

Mar-21

YOY

Dec-21

QOQ

Total Income (Rs cr)

₹ 50,591

₹ 43,705

15.76%

₹ 48,885

3.49%

Operating Profit (Rs cr)

₹ 12,628

₹ 11,734

7.62%

₹ 12,237

3.20%

Net Profit (Rs cr)

₹ 9,926

₹ 9,246

7.35%

₹ 9,769

1.61%

Diluted EPS (Rs)

₹ 26.85

₹ 24.97

₹ 26.41

OPM

24.96%

26.85%

25.03%

Net Margins

19.62%

21.16%

19.98%

Let us turn to the operating performance of TCS now. For the Mar-22 quarter, the operating profits were up 7.62% at Rs.12,628 crore. However, the operating margins did come under pressure at 25% for the fourth quarter and at 25.3% for the full year. The fourth quarter operating margins are sharply lower by nearly 200 bps on a yoy basis, and this has been largely driven by sharp spike in manpower, contracting and attrition costs to TCS.

The operating margins, although lower on a you basis, was higher on a sequential basis. Also, the operating margins are still about 200-300 bps above the median OPM of the large size IT companies in India. The big challenge has been attrition with the full year IT services attrition sharply up by 200 bps to 17.4%. However, the operating cash flows for the year stood at 111% of the net profit, which has sustained despite challenges.

Net profits for the Mar-22 quarter was up 7.35% at Rs.9,926 crore as the higher revenue advantage edge got neutralized by higher operating costs. With a Q4 dividend pay-out of Rs.22 per share, TCS has paid back Rs.31,424 crore if you combine both dividends and buyback of shares. PAT margins fell sharply from 21.16% in the Mar-21 quarter to 19.62% in the Mar-22 quarter. NPM was also 36 bps lower on sequential basis.

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