TCS Q4 Results, What is the Result of TCS Q4?

TCS Q4 Results 

TCS (Tata Consultancy Service) released its Q4 results on April 12th as per the requirements of Indian Accounting Standards (Ind AS) under the Companies Act 2013 and International Financial Reporting Standards (IFRS).

In the fiscal year 2024, TCS achieved significant milestones. The Total Contract Value (TCV) of the Order Book reached an all-time high of $42.7 billion, with a record-breaking TCV of $13.2 billion in the fourth quarter (Q4).

The full-year revenue amounted to $29.08 billion, indicating a 4.1% year-over-year (YoY) growth, with a constant currency (CC) growth of 3.4%. The growth was particularly driven by the UK, which experienced a notable increase of 10.1%, along with strong performance in Regional Markets, showing a growth of 19.8%.

By domain verticals, the growth was led by Energy, Resources, and Utilities with a remarkable 12.6% increase, for FY 2023 - 2024 followed by Manufacturing with a growth of 7.3%,  for FY 2023 - 2024 and Life Sciences & Healthcare with a 4.8% increase.

The operating margin stood at 24.6%, while the net margin was 19.3%. The net income reached $5.62 billion, reflecting a robust 7.8% YoY growth.

   

What is the Result of TCS Q4?

In Q4 TCS, results show a revenue of $7.36 billion with 2.2% growth YoY, a net income of $1.5 billion with a growth of 8.0% YoY, and a strong operating cash flow of 100.4%. And its net operating margin is 26% at 150 bps.

The company's CEO and MD, K. Krithivasan, said that our numbers “validate the robustness of our business model and execution excellence. In the global macro uncertainty, we are providing our customers with their core priorities, innovation, and thought leadership,”.

TCS Chief HR Officer Milind Lakkad said that “good performers have given double-digit hikes, and the company has reduced attrition by 12.5%.” And its chief Chief Operating Officer and Executive Director, N. Ganapathy Subramaniam, said that more “broad-based deals across various geographies and domains, like the mega-deal won at Aviva Insurance Company in the UK,” showed that the company's strong core BFSI still works like a charm. 

Area of Growth By Region and Domain 

TCS has grown 2.2% compared to the previous Q4 of FY23 -24 despite the global macro uncertainty which is still plagued by geopolitical tensions, climate disasters and uncertainty in govt policies due to political headwinds in most representative democracies. 

Region Growth

As per its Q4 reports, the company has improved its presence across regions and domains. Its biggest region of revenue earning is the Americas, particularly North America, which has 50.0%, and Latin America, which has 2.0%, but the company’s biggest growth comes from the Indian market, which saw 6.7% for Q4 Fy2024 and 37.9% growth compared with the previous year-over-year.

This table presents the percentages for Q4 of FY2023 and FY2024 for different geographical regions, along with the year-on-year cash conversion growth for Q4.

Domain Growth 

TCS offers a lot of vertical and various domains to its customers for services, but the company's three strong performances are BFSI, consumer business, and life sciences and health care.

But for this quarter, surprisingly, the biggest growth comes from manufacturing, which has 8.8% for Q4 FY2024 and CC YOY growth of 9.7%, followed by energy resources and utilities with 5.6% for Q4 FY2024 and CC YOY growth of 7.3%.

But still, BFSI (Banking Financial Services and Insurance) dominates their market share with 31.3% Q4 FY2024 and CC YOY growth of 3.2%. Their largest mega deal with Aviva Insurance Company in the UK shows the company's mid-short-term trajectory while diversifying its vertical domain portfolios. 

This table shows the percentages for Q4 of FY2023 and FY2024 for different domains (industries), along with the year-on-year cash conversion growth for Q4.

TCS Q4 Highlights 

In its Q4 report, TCS highlighted its book order, i.e., total contract value, and various partnerships that it had signed during FY2023–FY2024. We will see some of the significant ones. The highlights show that most are B2B contracts in the report. 

• The most prominent is a 15-year expansion of partnerships with Aviva, a UK-based insurance company; this will be managed by Diligenta, a UK-based TCS subsidiary company. This will help in end-to-end policy administration for 5.5 million policies. This is a one-of-a-kind B2B agreement.
• The TCS had Euroclear Finland, a National Central Securities Depository (CSD), was in need of a platform that would help it integrate with the European Central Bank's Target 2 securities for better cross-border settlements. 
• Ontario Teachers Pension Plan (OTPP) and TCS had shared a long and strategic business partnership in IT, with cloud migration and driving automation to improve service transformation for its clients. 
• TCS has been a long-term client of EasyJet, a European airline that is looking to transform its IT operations with new platforms. TCS will be providing assistance by using the TCS Cognix and ignio AIOps to help the client move from the physical data center to cloud-based services, which will improve the scalability of services and reduce costs. 
• The company had also signed a deal with Ramboll, a Denmark-based company that wants to move its IT and services to the cloud to reduce its carbon footprint and improve its scalability. 

 IFRS Statements 

 The consolidated statements of comprehensive income  that were released part  of the IFRS standards are given below for March 31, 2023, and March 31, 2024

*excludes settlement of legal claim the one-time charge of $125 million towards the settlement of the legal claim

Three-month Consolidated Statements of Comprehensive Income

For the three-month periods ended March 31, 2023, and March 31, 2024

Consolidated Statements of Financial Position

As of March 31, 2023, and March 31, 2024

Note: Figures are in millions of dollars.