In a remarkable turn of events on the stock market on Monday, Tata Consultancy Services (TCS) experienced a significant boost as its shares escalated over 1.50 per cent. This surge was a direct response to the IT giant’s impressive performance in the fourth quarter of the fiscal year 2024, where it reported a robust 9 per cent growth in net profit totaling Rs 12,434 crore. The market reaction was buoyant, with the company’s shares climbing to Rs 4,063 on the Bombay Stock Exchange (BSE) and edging slightly higher to Rs 4,064.20 on the National Stock Exchange (NSE).
The financial disclosure, which was announced after market hours on the preceding Friday, also had a massive impact on TCS’s market valuation. Market capitalization of TCS skyrocketed by Rs 7,489.44 crore, placing the valuation at a staggering Rs 14,54,832.99 crore. This rally in the company’s stock comes in the wake of what can be described as a year of solid financial growth for the Tata Group subsidiary. Over the fiscal year, TCS has seen its net profit ascend by 9 per cent to a commendable Rs 45,908 crore. Correspondingly, the company’s revenue has taken an upturn, mounting to Rs 2,40,893 crore from the Rs 2,25,458 crore reported a year earlier.
Despite commendable overall yearly gains, TCS’s performance wasn’t uniformly stellar across all geographic segments. The company faced setbacks in some of its crucial markets, with North America, TCS’s largest market geographically, witnessing a dip of 2.3 per cent in revenues. Continental Europe, holding the spot of the third-largest market for TCS, also saw a fall of 2 per cent in its revenues in the January-March quarter.
In stark contrast to the international market struggles, TCS’s domestic business in India was flourishing. The company posted nearly a 38 per cent growth in its revenues domestically, a significant factor that bolstered them to achieve a 3.5 per cent growth in revenues, amounting to Rs 61,237 crore, during the quarter.
In light of the challenges and successes, TCS chief executive and managing director K Krithivasan shared insights with reporters on the company’s performance and outlook. Commenting on the North American market and the banking, financial services, and insurance sector—which is the largest sector for TCS—Krithivasan pointed to prevailing uncertainties that are currently curtailing growth. However, he communicated a sense of optimism, suggesting that there are indications of these market challenges bottoming out and that a trajectory of growth is expected to resume.
Sharing projections for the coming fiscal year, Krithivasan said, “It is difficult to say when growth will return… but FY25 will be better than FY24.” Although not dissatisfied with the current performance, he noted that an additional growth of up to 1 percentage point would have made the outcomes more gratifying for the company.
The developments at TCS not only underscore the ever-evolving landscape of the global IT services industry but also highlight the strengths and strategic resilience of one of India’s premier technology firms. As markets anticipate a return to growth in TCS’s largest sectors, the company’s adaptability and robust performance in its home market offer a promising glimpse into the future, drawing the attention of investors and industry spectators alike.
