TCS Revenue Growth Stalls in Third Quarter

Despite a year-on-year increase of 4.5% in constant currency, Tata Consultancy Services (TCS) experienced a flat sequential revenue growth in the December quarter. In dollar terms, the revenue saw a 3.6% rise, reaching $7.5 billion. This underwhelming performance is attributed to seasonal factors and a softer demand environment.

Impact Across Geographies and Verticals

TCS faced declines in its key markets, with North America and Continental Europe dropping by 2.3% and 1.5%, respectively. The BFSI sector, a mainstay for TCS, remained stagnant with a mere 0.9% growth. Additionally, the communications & media and life sciences sectors witnessed significant year-on-year declines.

Looking Ahead: CEO's Optimistic Outlook

TCS CEO K Krithivasan highlighted the growth in total contract value (TCV) after two quarters, expressing confidence in the medium-term prospects. He anticipates an improvement in discretionary spending sentiments with the new US government, which could bolster future growth.

Record Order Book and Major Deals

The December quarter saw TCS's order book swell to $10.2 billion, up from $8.6 billion in the previous quarter. A notable achievement was securing a major contract with BSNL for deploying 4G networks across India, marking one of the largest domestic IT services deals.