Revenue at Indian IT services giant Tata Consultancy Services Inc. increased by 2.9%, or 1.7% year over the year in constant currency, in its fiscal third quarter ended 30 December, the group reported today. Revenue totalled USD 7.28 billion.

K Krithivasan, CEO and managing director, said, “Our strong performance in a seasonally weak quarter buffeted by macro-economic headwinds, demonstrates the strength of our business model with a well-diversified portfolio and a customer centric strategy. We are seeing strong deal momentum across markets resulting in a solid order book providing visibility into our long-term growth. We are seeing tremendous interest in Generative AI and are leading the innovation and exploratory efforts for our customers in this area.”

The group’s operating margin stood at 25.0%; an expansion of 0.5% over the year. This figure excludes the one-time charge of $125 million towards settlement of a legal claim.

Net Income stood at $1.41 billion, up 7.0% year-on-year with a net margin at 19.4%. This figure also excludes the one-time charge of $125 million towards settlement of a legal claim. According to Bloomberg (paywall), TCS third quarter net income missed analysts’ estimates.

In November 2023, the US Supreme Court rejected an appeal by TCS and confirmed the award of USD 140 million in punitive damages for improperly taking confidential information and trade secrets. In October 2023, TCS fired 16 employees for code of conduct violations and six unnamed vendors were debarred from doing business with TCS.

Reported revenue is as follows.

Among industries, growth was led by the Energy, Resources and Utilities vertical which grew 11.8%, manufacturing grew 7.0% and life sciences and healthcare which grew 3.1%. The Consumer Business Group (CBG) fell by 0.3%, BFSI also fell by 3.0%, while communications & media declined by 4.9% and technology & services fell by 5.0%. Regional markets grew 19.2%.

Among major markets, the UK led with 8.1% growth; Continental Europe grew 0.5% and North America decreased by 3.0%. In emerging markets, India led with 23.4% growth, Middle East & Africa grew 16.0%, Latin America grew 13.2%, and Asia Pacific grew 3.9%.

N Ganapathy Subramaniam, COO and Executive Director, said, “The quarter saw us make significant progress in many projects of national importance, demonstrating our execution strength. Our products and platforms had a strong quarter with new wins and go-lives.”

Samir Seksaria, CFO, said, “Our disciplined execution and operational rigor drove strong improvement in our industry leading margins despite seasonal headwinds. We are making the right investments in our people, innovation and infrastructure to differentiate ourselves and create long term value for all our stakeholders.”

Milind Lakkad, Chief HR Officer, said, “The vibrancy and energy levels in our offices are increasing as more and more of our employees are back in the offices. We expect to be back to our normal operating mode by the end of the current fiscal year. Parallelly, attrition is trending down and at 13.3%, is now in our range of comfort. We are committed to hiring from college campuses and growing talent organically. We have commenced our campus hiring process for the next year and see tremendous excitement among freshers to join TCS.”

Tata Consultancy Services closed at INR 3,735.55 (USD 44.99), up 0.61% on the day and 4.92% below its 52-week high of INR 3,929.00 (USD 47.32), set on 18 December 2023. The company has a market cap of INR 13.43 trillion (USD 161.74 million).