India’s largest IT services company, Tata Consultancy Services on Friday gave some relief
to Indian IT industry as it indicated that current financial year (FY25) would be better than
FY24.
Announcing its fourth quarter (Q4) and whole fiscal results, TCS management said that
FY25 would be a better year than last fiscal year when demand environment remained
tough.
“We can’t say when the growth will come back, whether in the first half or in the second half
but we expect that FY25 will be a better year than FY24,” K Krithivasan, CEO & MD of TCS
said in company’s post earnings press conference.
Given the robust deal pipeline, any uptick in the project ramp ups can easily translate into
revenue growth in the current fiscal year.
For both Q4 and FY24, the Tata Group company reported a record deal pipeline. During the
quarter, the company had a record TCV (total contract value) of $13.2 billion. For FY24, total
contract value stood at $42.7 billion.
Though high TCV has not translated into revenue accretion in FY24, this situation is likely to
change in the current (fiscal) year. We see a slight uptick in the project delivery speed, which
augurs well for the Indian IT industry,” an IT expert told the Databiz Times.
The biggest support may come from key verticals like BFSI (Banking, Financial Services &
Insurance), which has been witnessing negative growth for many quarters now. In Q4, TCS
also saw a degrowth of 3.2% in BFSI vertical. This vertical contributed 31.3% to its total
revenue during this period.
“We have bottomed out in BFSI and also in North America. We expect that the major
markets should turn around in this fiscal,” Krithivasan said.
TCS revenue for Q4 was at $7.36 billion, which was a rise of 1.1% in constant currency term
over the previous quarter. For the whole fiscal, it posted a revenue of $29.08 billion, up 3.4%
on Y-o-Y basis.
The company also improved its operating margin by 100 basis points sequentially to 26% for
the March quarter.
“In FY24, our disciplined approach to operations have helped us expand our industry-leading
margins. We have driven 190 basis points improvement on the back of productivity
improvement during fourth quarter. In a challenging environment, we persisted with our long-
term investments in workforce reskilling, research and innovation,” Samir Seksaria, Chief
Financial Officer of TCS said.
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