Tata Consultancy Services (TCS) reported fourth-quarter net income that increased 7.4% year-on-year to ₹9,926 billion, driven by improved performance across all industries across all regions.
Revenue for the quarter ended March 31 rose 15.8% to 50,591 crore. Adjusted for currency effects, growth was 14.3%. Operating margin was 25%, down 189 basis points from the prior-year period.
For the full year ended March 31, the company reported net profit growth of 14.8% to 38,327 crore. Revenue rose 16.8% to 1,91,754 crore. Currency-adjusted growth was 15.4%.
“We are ending FY22 on a strong note, with mid-teens growth and maximum incremental revenue ever,” said Rajesh Gopinathan, CEO and MD. “Overall, it’s a very strong year (FY22). We’re happy with how we executed the rebound. Our investments in services pay off.
“Increasing involvement in our clients’ growth and transformation processes and an unprecedented high order backlog provide a strong and sustainable foundation for continued future growth,” he added.
“It is extremely gratifying to end the year with robust, broad-based growth, industry-leading margins and the highest-ever backlog,” said N. Ganapathy Subramaniam, COO and ED.
“Throughout the year, we have embarked on technologically challenging, industry-first transformational programs, leveraging the full power of the capabilities of TCS and our partner ecosystem to successfully deliver market-changing outcomes,” he said.
“Our continuous investment in building new skills, our passion for innovation, our contextual knowledge and most importantly our confidence have been key to this and these position us very well for further future success,” he added.
“While we continue to make any investments needed to support our growth aspirations, this year we have weathered headwinds to once again deliver an industry-leading operating margin,” said Samir Seksaria, CFO.
“The successful completion of our fourth buyback in five years is another milestone in our shareholder-friendly approach to capital allocation,” he added. The company said it had hit its highest-ever order book of $11.3 billion in the fourth quarter and total order book for fiscal 22 was $34.6 billion.
All of the company’s industries grew in the mid-to-high teens during the quarter and year, and the growth was led by retail and consumer staples. Growth among markets was led by North America, followed by the UK and continental Europe. The company said demand remained strong across all markets, verticals and services for both the quarter and the full year, with growth being led by cloud, cyber security, enterprise application services & IoT and digital engineering.
In FY22 there was a net increase of 1,03,546 employees and the number of employees was 5,92,195. IT services turnover was 17.4% in the year. At the end of the fiscal year, the company had free cash flow of ₹39,181 crore and returned cash of ₹31,424 crore to shareholders through share buybacks and dividends, the company said.
For the fourth quarter, the company has proposed a final dividend of £22 per share. The average wage increase in FY22 was 6% to 8% and there would be a similar increase in FY23, Mr Gopinathan said.
The company announced that it would initially hire 40,000 employees in the current year. It is unlikely that there will be any negative impact from the Russian war, he added.