India’s largest software exporter Tata Consultancy Services on Wednesday announced $2.4 billion (about Rs 17,740 crore) share buyback after reporting strong quarterly earnings, fueled by continued demand for its digital services.
The IT giant’s net profit jumped over 12 per cent to Rs. 9,769 crore in the three months to December 31, as compared to the same period last year, exceeding analysts’ expectations.
Strong demand across business segments pushed revenue growth in the third quarter to its highest level in five years, rising more than 16 per cent year-on-year to Rs. 48,885 crore, the Mumbai-headquartered company said.
“We have had an exceptional quarter,” Chief Executive and Managing Director Rajesh Gopinathan said at a media briefing after the results were announced.
“In calendar year ’21, we have now touched the $25 billion-revenue mark. Most importantly, growth has come with consistent industry-leading profitability.”
The country’s second most valuable firm by market size has announced that it will buy back shares worth Rs 180 billion at a price of Rs. 4,500 per share.
This represents a 16.67 per cent premium to Wednesday’s stock’s closing price of Rs. 3,857.
Operating margin fell marginally to 25 percent compared to 25.6 percent in the previous quarter, driven by an increased focus on hiring and retaining talent.
TCS said it hired 28,823 new employees in the quarter, even as employee leave – a key metric for IT companies – rose to 15.3 per cent from 11.9 per cent in the previous quarter.
TCS was at the forefront of an IT boom that saw India as a back office in the world, as firms in North America and Europe worked taking advantage of a skilled English-speaking workforce.
The company earns more than 80 percent of its revenue from its western markets outside India.
Overseas growth at TCS was led by North America, which accounts for half of its total business and saw revenue growth of 18 percent year-over-year.
Revenue for Europe, the United Kingdom and Latin America increased by 17.5, 12.7 and 21.1 percent, respectively, compared to the year-ago quarter.
TCS received new orders worth $7.6 billion (about Rs 56,190 crore) in the quarter, up 12 per cent over the orders of $6.8 billion (about Rs 50,275 crore) it signed in the previous quarter.
The board also approved an interim dividend of Rs. 7 per share for shareholders.
Shares of TCS closed with a fall of 1.5 per cent in Mumbai ahead of the release of the results.
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