Result Analysis: Tata Consultancy Services Ltd. Result Update Q4FY22 and FY22


Particulars (In Rs. Cr.) Q4FY22 Q3FY22 Q4FY21 QoQ % YoY%
Revenue from Operations 50,591 48,885 43,705 3.5% 15.8%
Other Income 981 1,205 931 -18.6% 5.4%
Total Income 51,572 50,090 44,636 3.0% 15.5%
Employee Benefit Expenses 28,353 27,168 23,625 4.4% 20.0%
Employee benefit Expenses as % of Sales 56.04% 55.58% 54.06%
EBIT 12,628 12,237 11,734 3.2% 7.6%
EBIT Margin 24.96% 25.03% 26.85% (7) bps (189) bps
Profit After Tax 9,959 9,769 9,246 1.94% 7.7%
PATM (%) 19.31% 19.50% 20.71%
EPS (in Rs. ) 26.85 26.41 24.97 1.67% 7.53%
Segment Revenue Q4FY22 Q3FY22 Q4FY21 QoQ % YoY%
BFSI 19,532 18,998 17,559 2.8% 11.2%
Manufacturing 4,951 4,722 4,213 4.8% 17.5%
Retail and – Consumer Business 8,209 7,852 6,778 4.5% 21.1%
Communication, Media and Technology 8,475 8,254 7,042 2.7% 20.3%
Life Sciences and Healthcare 5,416 5,169 4,524 4.8% 19.7%
Others 4,008 3,890 3,589 3.0% 11.7%

Result Highlight: 

  • TCS Consolidated Revenue rose 3.5% QoQ and 15.8% YoY to Rs 50,591 crore – above the estimates of Rs. 50263 Crore. In Constant Currency terms revenue grew by 3.2% QoQ. Other income declined by 18.6% QoQ to Rs. 981 Crore. For FY22 Revenue is up 16.8% to Rs. 1,91,754 Crore from Rs. 1,64,177 Crore in FY21

  • Operating Profit Margin remained almost flat at 24.96% from 25.03% last quarter.

  • Net profit rose 7.7% YoY to Rs 9,959 crore for the March quarter compared with Rs. 9246 crore in the same quarter last year. Reported strong Cash from Operations at 111.3% of Net Profit.

  • Attrition rate at 17.3% continues to be the lowest in the industry however increased from 15.3% in Q3FY22.

  • All Industry Verticals Grew mid to high teens.

  • Growth among markets was led by North America which grew (+18.7%). UK grew (+13%), Continental Europe grew (+10.1%). Among emerging markets, Latin America grew (+20.6%), Middle East & Africa grew (+7.3%), India grew (7%), and Asia Pacific grew (+5.5%).

  • Highest TCV: $11.3 Bn (win two mega deals close to a Billion each) in Q4 against $7.6 billion in Q3, taking the total deals to $34.6 billion for FY22.

  • Among the deal wins were Sun Life Financial, Payments Canada, NXP Semiconductor, Ministry of External Affairs at the Government of India, etc.

  • Added 10 clients in the $100 Mn+ bucket, 19 in the $50 Mn+ bucket, 40 in the $20 Mn+ bucket and 52 in the $10Mn+ bucket

  • Added 35,209 employees highest ever, taking its total employee base to 592,195 as of March, 2022

  • The company approved final dividend of Rs 22 per share.

 Management commentary: 

  • Commenting on the Q4 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: ” “We are closing FY22 on a strong note, with mid-teen growth and adding the maximum incremental revenue ever. Increasing participation in our customers’ growth and transformation journeys, and an all-time high order book provide a strong and sustainable foundation for continued growth ahead.”

  • N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: “It is immensely satisfying to close the year with robust, broad-based growth, industry-leading margins and the highest ever order book. During the year, we took on technologically challenging, industry-first transformational programs and brought to bear the full power of TCS’ capabilities and that of our partner ecosystem, to successfully deliver market-changing outcomes. Our continued investments in building newer capabilities, our passion for innovation, our contextual knowledge and most importantly, our self-belief have been key to this, and these position us very well for continued success ahead.”

  • The Attrition rate will optically go up for next two quarters on a last twelve months basis before coming down.

  • $11.3 Billion was due to two mega deals of close to a billion each. The TCV will fall back to $8 – $8.5 billion on a quarterly basis.

  • North America has been driving growth for the last few quarters. BFSI comes off the large base and still continues to grow.

  • The growth needs to be looked at based on growth of 4% in third quarter which is seasonally weak quarter. Momentum is Good. We don’t see any challenges.

  • 26-28% continues to be the aspiration Operating Profit Margin band. We have long term cost structure in place to deliver this margin.


Tata Consultancy Services (TCS) reported revenue above the Street expectations in the quarter ended March 2022 however Profit was below the estimates due to lower other income. The Deal value $11.3 Bn of the company is at record high and above the average of $7.8bn in the past.  It maintained industry leading margin at 25%. TCS attrition rate spiked to 17.3% with whole industry witnessing higher attrition rate, still TCS attrition rate is lowest in industry. Adding investments in people, progressive HR policies and an empowering culture have made TCS the global industry benchmark in talent retention. Strong order book and robust deal pipeline will be the strong growth drivers for next 3 years with the company achieved double-digit growth for FY22 and will benefit from 3 key spending themes: cloud transformation, customer experience, & core modernization. At the CMP of Rs. 3699, TCS is trading at PE multiple of 35.69x.  Valuing the company at 29.4x FY23E EPS, we recommend buy on TCS at CMP of Rs. 3699 for the Target Price of Rs.4420.