IT major Tata Consultancy Services net profit rose by 2 per cent to ₹11,058 crore in the third quarter of FY24, compared with ₹10,846 crore it reported in the corresponding period last year. However, on a sequential basis, the profit was down 2.5 per cent, from ₹11,342 crore in Q2 FY23.

The company declared a third interim dividend of ₹9 and a special dividend of ₹18 per Equity Share of ₹1 each. 

Even as the US Federal Reserve is expected to hold interest rates steady, the North American market continued to be a significant pain point of the firm. North America, which constitutes nearly half of TCS’ business, degrew by 3 per cent year on year this quarter. In the previous quarter, the decline of the North American market grew by 0.1 per cent. The BFSI vertical also had a decline of 3 per cent year on year in the December quarter; last quarter, the decline was 0.5 per cent. 

TCS CEO K Krithivasan said there has been no fundamental change in market sentiments, despite the US Federal Reserve’s decision on interest rates. “The optimism around interest rates has not resulted in a reduction of the uncertainty that we see in decision-making. The sentiments have remained the same, so I don’t think we are not ready to say that it will recover by Q4,” he said. 

Similarly, the decline of growth in the BFSI vertical was attributed to furloughs in Europe and two large clients completing their projects. The BFSI sector is expected to bounce back in the mid to long term. 

Revenue growth

The company’s revenue from operations grew 4 per cent y-o-y to ₹60,583 crore in Q3 FY24 compared with ₹58,228 crore it reported in Q3 FY23. Revenues grew by 1.5 per cent sequentially from Rs 59,692 in Q2FY24. Operating margins rose to 25 per cent this quarter from 24.3 per cent reported in Q2 FY24. According to Samir Seksaria, Chief Financial Officer, this growth came despite headwinds from higher third-party costs. Growth in operating margins excludes a $125 million legal claim by Epic Systems, which also moderated margins. 

The order book stood at around $8.1 billion for the quarter. The management added that there were no mega deal wins, “I am comfortable with the order book; the growth was largely broad-based, and we were able to achieve it without mega deals,” TCS COO N Ganapathy Subramaniam added. 

Krithivasan added that four generative AI projects evolved from proof of concept to production, although they did not have a tangible impact on revenue. Discretionary spending continues to be delayed; the top four verticals for TCS saw moderate growth. 


Attrition in the LTM IT services continues to abate, at around 13.1 per cent in Q3. The total headcount for the company decreased yet again to 603,305. Headcount decreased by 5,680 associates, and this trend is expected to continue for the next two quarters.

Analysts characterized this quarter as one of tepid growth, ‘‘In Q3FY24, TCS showed tepid revenue growth, attributed to subdued expansion due to ongoing challenges in discretionary spending and furloughs. However, this downturn is expected to be partially offset by the positive impact of previously secured deals in the ramp-up phase. Margins underwent a slight QoQ expansion, driven by alleviating supply-side constraints and operational leverage. The sustained momentum in deal wins, particularly fueled by cost optimization initiatives, is expected to contribute positively,” said Dhruv Mudaraddi, Research Analyst, Stoxbox.