What is your view on the TCS quarterly results declared on 08 January for the Dec-20 quarter?

The following are the key highlights of the TCS annual results reported by the company on 08 January for the quarter ended Dec-20.

a) For the Dec-20 quarter TCS reported 5.42% growth in revenues at Rs.42,015 crore on a YOY basis. This was largely on the back of robust order wins and growth across key markets.

b) TCS also benefited from strong tech spending globally as well as a bigger shift to digital businesses by companies the world over. TCS saw strong growth across the various vertical practices and the various geographies.

c) TCS operating profits were sharply up by 12.1% at Rs.11,184 crore in the Dec-20 quarter. This was achieved on sharper focus on high value customers and on value added products and services during the quarter.

d) As a result, the Operating Margins or OPM expanded by 160 bps YOY to 26.62% for the Dec-20 quarter despite manpower cost pressures. The OPM also showed a sharp bounce of 42 bps on a quarter on quarter basis.

e) In terms of bottom line, the PAT for the quarter was up 7/17% at Rs.8,727 crore. TCS also declared an interim dividend of Rs.6 per share which translates into 600% on the stock’s face value of Rs.1.

f) The PAT margins for the Dec-20 quarter expanding by 34 bps to 20.77% and this expansion on YOY basis tapered as other income was lower than last year and the revenue base was much higher.

g) In the Dec-20 quarter, TCS reported all-round growth in revenues and profits. Interestingly, during the quarter, TCS also reported the lowest employee attrition in the IT services business at 7.6%. This is a record of sorts.

h) Among business verticals, the growth in business were driven by manufacturing practice grew by 7.1%, Life sciences by 5.2%, Communication by 5.5% and BFSI at 2.2% on a QOQ basis. While BFSI growth has been tepid, it still dominates the overall revenues.

i) Geographically, there was growth across all principal markets including North American at 3.3%, UK at 4.5%, Western Europe at 4.5% and India at 18.1%.

Overall, it was a stellar set of results in the midst of the pandemic.