TCS Q3 Results: 12% Profit Jump, Beating Expectations & Big Dividend for Shareholders
TCS Q3 Results
TCS Q3 Results: Strong 12% Profit Growth, Beating Expectations, and Big Dividend for Shareholders
Tata Consultancy Services (TCS), India’s largest IT services company, has delivered a stellar performance for the December 2024 quarter, reporting a solid 12% year-on-year increase in net profit.
The results have exceeded market expectations, further solidifying TCS’s position as a leader in the global IT services space.
Along with the strong financial results, TCS has also announced significant dividend payouts, providing an additional boost to its investors.
The company declared an interim dividend of ₹10 per share, along with a special dividend of ₹66 per share, with a record date set for January 17, 2025. These dividends will be credited to shareholders’ accounts by February 3, 2025.
TCS Q3 Results: Profit Surges, Revenue Misses Estimates
For the December 2024 quarter, TCS reported a consolidated net profit of ₹12,380 crore, reflecting a robust 12% growth compared to ₹11,058 crore in the same period last year.
This performance beat analysts’ expectations, with many projecting a profit of ₹12,308 crore. TCS’s strong profit growth can be attributed to its efficient cost management, improved productivity, and sustained demand for its IT services across key markets.
However, the company’s revenue growth came in slightly below expectations. TCS reported a revenue of ₹63,973 crore for the quarter, a 6% increase from ₹60,583 crore in the December 2023 quarter.
Analysts had expected the company to report revenue of ₹64,218 crore, which suggests that while growth remains solid, TCS did face some challenges in achieving higher-than-expected revenue numbers. T
he slight miss in revenue growth could be attributed to factors like foreign exchange headwinds and slower-than-anticipated demand in some of the company’s key verticals. Nonetheless, the overall performance remains highly impressive.
Before the announcement of these results, TCS’s stock closed at ₹4,036.65 on the Bombay Stock Exchange (BSE), down by 1.72%.
Despite the slight decline in the stock price ahead of the earnings report, the robust profit performance and the generous dividend payout have since been expected to improve investor sentiment.
Major Dividend Announcement: Record Date Set for January 17, 2025
One of the most notable aspects of TCS’s Q3 results is the company’s announcement of a special dividend, which comes in addition to the regular interim dividend.
The company declared an interim dividend of ₹10 per share, along with a special dividend of ₹66 per share.
The total payout per share, therefore, amounts to ₹76, which will undoubtedly be welcomed by shareholders.
TCS has set the record date for the dividend as January 17, 2025. Shareholders who hold TCS stock as of this date will be eligible to receive the dividend payments.
The dividend will be credited to shareholders’ accounts by February 3, 2025. This marks the third dividend payout by TCS in the current financial year, following two previous interim dividends of ₹10 per share each.
With these consistent and sizable dividend payouts, TCS has once again demonstrated its commitment to returning value to shareholders.
Key Performance Drivers Behind the Strong Profit Growth
While revenue growth may have slightly missed analysts’ expectations, TCS’s overall performance was driven by several positive factors.
The company’s ability to maintain strong profitability despite a challenging global economic environment speaks to its operational efficiency and robust business model.
One key factor contributing to TCS’s success is its diversified business portfolio. The company continues to see strong demand for its services across key verticals such as banking, financial services, and insurance (BFSI), retail, healthcare, and manufacturing.
As businesses worldwide continue to invest in digital transformation, cloud services, artificial intelligence, and cybersecurity, TCS has positioned itself as a go-to partner for these projects.
Additionally, TCS has continued to benefit from its strong focus on innovation and technology. The company’s investments in areas like automation, cloud computing, and AI have paid off in terms of winning large contracts and expanding its footprint in emerging markets.
The company’s Total Contract Value (TCV), a measure of the total value of new deals signed, has also shown significant growth.
In the December 2024 quarter, TCS secured a TCV of $1.02 billion, up from $810 million in the same quarter last year and $860 million in the previous quarter.
This highlights TCS’s strong sales performance and its ability to win large, multi-year contracts despite global macroeconomic uncertainties.
CEO’s Statement on TCS’s Performance
TCS’s CEO and Managing Director, K. Krithivasan, expressed satisfaction with the company’s performance in the December quarter, particularly highlighting the growth in Total Contract Value (TCV).
He mentioned that TCS’s focus on winning large strategic contracts, along with its deep expertise in the digital transformation journey, has helped the company maintain a competitive edge.
Krithivasan also pointed to the company’s diversified business model and geographical reach as key factors that have helped TCS weather macroeconomic challenges.
The company’s strong presence in both developed and emerging markets continues to drive growth, while its digital services portfolio remains a critical contributor to overall performance.
TCS Q3 FY2024-25 Results: Summary
- Net Profit: ₹12,380 crore (up 12% YoY)
- Revenue: ₹63,973 crore (up 6% YoY)
- Interim Dividend: ₹10 per share
- Special Dividend: ₹66 per share
- Record Date for Dividends: January 17, 2025
- Credit Date: February 3, 2025
- Total Contract Value (TCV): $1.02 billion (up from $810 million YoY)
- Stock Performance: Closed at ₹4,036.65 (down 1.72% before results)
TCS Sets the Bar for Peers in IT Industry
TCS’s strong performance for Q3 FY2024-25 sets a high standard for other major IT companies to follow, particularly as competitors such as Infosys, Wipro, and HCL Technologies prepare to report their results in the coming weeks.
TCS’s ability to grow its profit significantly, even in the face of a slightly weaker-than-expected revenue growth, underscores its resilience and the strength of its business model.
Moreover, the company’s consistent dividend payouts highlight its robust cash generation capabilities and commitment to rewarding shareholders.
As TCS continues to execute on its digital transformation strategy and capitalize on the growing demand for IT services globally, it is well-positioned for sustained growth and continued market leadership.
For investors and analysts alike, TCS’s Q3 results not only reflect the company’s strong financial health but also reaffirm its reputation as one of the most reliable and innovative players in the global IT services industry.
With the TCV growth and significant dividends, TCS is well on track to continue delivering value to its shareholders for the rest of the financial year.
