TCS Q4 rises 7.35% at Rs9,926 crore; Attrition remains high at 17.4%

12 Apr 2022 , 09:16 AM

Tata Consultancy Services (TCS) on Monday recorded a consolidated Profit after tax (PAT) for the Dec-21 quarter was up 7.35% at Rs9,926 crore on the back of higher revenue advantage getting neutralized by higher costs on the employee and attrition front. For the full year, the company recorded free cash flows of Rs39,181 crore .

With a Q4 dividend pay-out of Rs22 per share.

For the full fiscal year, the company has paid back Rs31,424 crore through a combination of dividends and buyback of shares. PAT margins tapered 21.16% in the Mar-21 quarter to 19.62% in the Mar-22 quarter. Even on a sequential basis, the net profit margins were lower by 36 basis points.

TCS reported a 15.76% growth in total sales revenues for the Mar-22 quarter on consolidated basis at Rs50,591 crore.

On a sequential basis, the revenues were up by 3.49%. In terms of verticals contributing to revenues, BFSI contributed Rs19,532 crore , CMT Rs8,475 crore, Retail Rs8,209cr and Life sciences Rs5,416 crore .

BFSI also contributed the most to the EBITDA of TCS in the Mar-22 quarter. TCS also reported highest ever order book in Q4 with TCV of 11.3 billion and full year TCV of $34.6 billion.

Full-year FY22 revenues were up 16.8% yoy at Rs191,754 crore , although constant currency growth was lower at 15.4% due to cross currency headwinds impacting the growth.

For the Dec-21 quarter, the consolidated operating profits were up 7.62% at Rs12,628 crore . For the full year FY22, TCS reported operating margins of 25.3%, which had taken a hit in the third quarter on account of higher manpower and attrition costs.

The company’s philosophy of investing in people, and its progressive workplace policies have resulted in industry leading retention in an environment of increased churn. IT services attrition continued to climb, reaching 17.4%. However, incremental attrition has moderated.

The operating margins were nearly 170 bps lower on a yoy basis. For the fourth quarter, the operating margin stood at 25%. However, for the full year the IT services attrition saw a 200 bps spike to 17.4%, something uncharacteristically high for TCS, compared to previous years. However, the operating cash flows for the year stood at 111% of the net profit.

TCS’ focus on organic talent development continues to produce best in class outcomes. In Q4, TCSers logged 22 million learning hours. For the full year, the company’s investments in learning and development resulted in the workforce acquiring 3.5 million digital competencies. The number of Contextual Masters crossed 50,000 — another key milestone in the journey to scale growth and transformation capabilities within the organization.