Tata Consultancy Services (TCS) reported a net profit of ₹12,380 crore for the third quarter of the financial year 2024-25, up 5.5 per cent compared to ₹11,735 crore in the same quarter of the previous fiscal year. Net profit increased by 3.9 per cent quarter-on-quarter compared to ₹11,909 crore in the second quarter.

It may be noted that including a one-time legal claim, net profit grew 12 per cent YoY, as the adjusted profit for the third quarter last year would be ₹ 11,058 crore.

Revenue for the company grew 5.6 per cent to ₹63,973 crore for the latest quarter. Most verticals and market saw sequential negative growth on QoQ basis. Top verticals consumer business and BFSI grew 1.1 per cent and 0.9 per cent respectively. Speaking on other verticals, K Krithivasan, Chief Executive Officer and Managing Director, called the healthcare and manufacturing vertical “a wait and watch department.”

UK grew by 4.1 per cent while the Indian market grew 70.2 per cent YoY. Negative revenue growth was recorded for the North America market at -2.3 per cent and continental Europe for -1.5 per cent. Regarding India’s growth, Krithivasan said the non-BSNL front contributed to the numbers, adding that the company expected BSNL to have hit peak and taper off hereon out.

“We’re expecting BSNL to reach peak and taper off but we’re very confident of regional growth elsewhere. We’ll be able to handle this. We’re not too worried and will find opportunities in other geographies to make for BSNL’s revenue decline,” he said.

Total contract value (TCV) grew 18 per cent to $10.2 billion. Operating margin stood at 24.5 per cent, a decline of 50 bps YoY, excluding settlement of legal claim. But with a sequential improvement of 40 bps.

Workforce weakens

The company’s workforce strength declined 0.8 per cent to a headcount of 607,354 even though LTM IT attrition rate grew to 13 per cent compared to 12.3 per cent last quarter.

Milind Lakkad, Chief HR Officer, said: “We promoted over 25,000 associates this quarter which brought the total promotions this financial year to more than 110,000. We continue to invest in employee upskilling and overall well-being. Our campus hiring for the year is going according to plan and preparations are afoot to onboard a higher number of campus hires next year.”

Stating that there is no direct linear co-relation between growth and headcount, Lakkad added that the company is on track to get campus hiring of 40,000 people. However, he anticipated reduction in quarterly attrition going forward. LTM numbers may go up and down accordingly.

Speaking on the results, Biswajit Maity, Sr Principal Analyst, Gartner, said, “TCS must continue focusing on improving service delivery, resource management, and the quality of deliverables, as customer feedback indicates concerns in these areas. If these issues are not addressed, they could hinder TCS’ growth momentum and long-term success.”