Tata Consultancy Services post 4 per cent dip in Q3 profit

The group said around 250 roles will transfer to Indian giant Tata Consultancy Services, although they will remain based at the firm's IT headquarters at Stockley Park in Middlesex

The group said around 250 roles will transfer to Indian giant Tata Consultancy Services, although they will remain based at the firm's IT headquarters at Stockley Park in Middlesex

Indias largest software exporter TCS yesterday said its net profit slipped 3.6 per cent to Rs 6,531 crore in three months to December due to margin compression and softness in the banking and financial services sector, which is its largest revenue segment. On yearly basis, the continental Europe grew by a whopping 22.3%, United Kingdom by 8.2% and India also performed well by 4.1%, while North America grew by 2.8% yoy.

"Now we are on a run-rate of $4 billion in annual revenues from digital services".

"TCS will provide valuable administration and quality customer service, and Transamerica will continue to engage with our customers, clients and advisors in the most meaningful ways to them by utilising our digital engagement platforms and developing new solutions that help people save, protect, invest and retire", Mark Mullin, Transamerica President and CEO, said.

The contract, which entails transforming Transamerica's United States insurance and annuity business lines, comes close on the heels of a mega deal TCS had clinched from television rating measurement firm Nielsen.

"The investments we have been making over the last few years in research and innovation, and in building intellectual property, are giving us a distinct edge.in winning such large transformational programmes", Gopinathan said, adding that the focus on digital has helped TCS bag over 150 deals in this space. "We will go through the appeal process", said V Ramakrishnan, CFO of TCS.

But the numbers are stark.

The brokerage house said that Tier-1 IT companies are likely to report constant currency (CC) growth of 1-2 percent as weak seasonality kicks in the quarter accompanied by the transformation that the IT industry is going through. A year ago, the digital business contributed 16.8% to TCS's overall revenue. Though it was able to retain the margin at 25.2 per cent in the December quarter compared with 25.1 per cent in the previous quarter, it remained below the target range for the fourth consecutive quarter.

Rajesh: The industry verticals grew above company average in Q3.

TCS plans to make a significant investment in the region, most notably by establishing its new North American insurance hub for business operations in Cedar Rapids, Iowa.

TCS also reported good performance in continental Europe, which contributes 11.1% of the total revenue.

During the quarter, revenues came in at Rs 30,904 crore, a 1.2 per cent growth sequentially and around a 4 per cent increase over past year. Analysts at HDFC Securities were expecting profit of Rs. 6,563 crore for the fiscal third quarter.

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