NEW DELHI: Tata Consultancy Services (TCS), the largest IT company in India, on Wednesday said its consolidated net profit for the quarter ended December climbed 12.3 per cent to Rs 9,769 crore from Rs 8,701 crore in the corresponding quarter last year.
Meanwhile, the IT giant’s revenue from operations rose 16% to ₹48,885 crore in the third quarter. It was ₹42,015 crore in the same period last year.In constant currency (CC) terms, the revenue has surged by 15.4%, when compared with the previous year period.
In dollar terms, the company’s revenue, at $6,524 million, up 3% over previous September quarter.
The company said the stellar Q3 performance has helped it achieve $25 bn in annual revenue in 2021.The company’s board has also approved buyback of shares worth up to ₹18,000 crore.
“The Board of Directors at its meeting held has approved a proposal to buy-back up to 4,00,00,000 equity shares of the company for an aggregate amount not exceeding ₹18,000 crore being 1.08% of the total paid up equity share capital at 4,500 per equity share subject to approval from shareholders,” TCS said in a filing.
The buyback will be executed at a premium of ₹643 from the current share price.
Rajesh Gopinathan, CEO and MD of TCS, said: “Our continued growth momentum is a validation of our collaborative, inside-out approach to our customers’ business transformation needs.”
TCS board has also declared interim dividend of ₹7 per equity share.
On Wednesday, ahead of the results, TCS scrip closed 1.50% lower at ₹3,857 apiece on NSE. In the last one year, the shares have surged by 21.37%, underperforming the Nifty IT Index which gained 25.02% in the same period.
“Customers love our engagement model, our end-to-end capability, and our can-do approach to problem solving. While mapping out their innovation and growth journeys, we are also helping them execute new-age operating model transformations to support those journeys,” Gopinathan added.
The company said it has a strong client addition, with 10 new $100 million-plus clients, taking the total to 58). TCS has also added 21 new $50 million-plus clients.
Meanwhile, net cash from operations at the end of the quarter stood at ₹10,853 crore which is about 111.1% of net income.
TCS’ attrition rate rose to 15.3% (voluntary TTM) on a trailing 12 month basis. To combat that, TCS has hired 34,000 fresh graduates in the third quarter in addition to 43,000 freshers in first half of the current financial year.
“The ability to attract and retain top quality talent across the world has been central to TCS’ business success and a source of competitive differentiation. We continue to set new records in talent acquisition. In addition to the 43,000 freshers we hired in H1, we onboarded 34,000 fresh graduates in Q3 – which is higher than our full year fresher hiring numbers in prior years. On the talent retention side, we continue to be the industry benchmark,” said Milind Lakkad, Chief HR Officer.
The company has added net headcount addition of 28,238 during third quarter, taking the total workforce strength to 556,986.
“By continuing to invest in our people, giving preference to internal candidates for the most exciting open positions, providing global deployment opportunities, fast track career paths linked to learning, and promotions to over 110,000 employees, we have been able to retain our best talent and overcome supply side challenges,” Milind added.
What is a share buyback
Share buyback, or share repurchase, is when a company buys back its own shares from investors or stakeholders. It can be seen as an alternative, tax-efficient way to return money to shareholders.
Usually, companies go for share buyback if it wishes to increase demand in the market. Share buybacks reduce the number of shares in circulation, which can increase the share value and the earnings per share (EPS).