Results Update Q4FY23
With a start to the Q4 earnings season, TCS is the first of the Nifty 50 and the first among the large IT services companies to declare its Q2FY23 results on 12th April 2023. This was followed by Infosys declaring its Q4 results on 13th April.
TCS Q4FY23 Results
Key Highlights
- Consolidated net profit of Rs 11,392 crore, registering a 14.7% YoY growth from Rs 9,926 crore in Q4FY22.
- Revenue from operations grew by 17% YoY to Rs 59,162 crore compared to Rs 50,591 crore in Q4FY22. Sequentially, revenue grew 1.6%.
- In constant currency (cc) terms, the revenue rose 10.7% YoY.
- Operating margin in Q2FY23 was 26.66%, lower by 1.3% on a YoY basis.
- The order book for the quarter stood at $10 billion with the total FY23 order book TCV (total contract value) coming in at $34 billion.
- During FY23, it onboarded over 44,000 freshers and also highest-ever number of experienced professionals.
- Revenue growth was driven by the UK (17% QoQ), retail & consumer packaged goods (CPG) (13% QoQ) and life sciences and healthcare (12% QoQ).
Management Speak
Chief Executive Officer and Managing Director, Rajesh Gopinathan said, “It is very satisfying to look back at our strong growth in FY 2023, on top of the mid-teen growth in the prior year. The strength of our order book demonstrates the resilience of demand for our services and gives us visibility for growth in the medium term. Krithi and I are working closely to ensure that the leadership transition over the next few months is smooth and seamless to all our stakeholders and that TCS is well positioned to capture the opportunities ahead.”
Samir Seksaria, Chief Financial Officer, TCS said, “FY 23 was a year of transition, as supply-side challenges abated while pandemic-depressed travel and discretionary spending normalised. We navigated this change well, without slowing down our investments in our people, research and innovation and intellectual property. Our longer-term competitiveness remains intact, giving us industry-leading profitability even as we pursue our growth aspirations.
Furthermore, TCS is undergoing a CEO transition, having appointed K Krithivasan as the CEO-designate to succeed Rajesh Gopinathan, who resigned in March this year.
Infosys Q4FY23 Results
Key Highlights
- Consolidated Revenue from operations increased 16% YoY to Rs 37,441 crore in Q4FY23.
- Consolidated Net profit stood at Rs 6,128 crore down by nearly 16% QoQ but up by nearly 6% YoY.
- In constant currency terms, the company’s revenue growth came in at 3.2% QoQ and 8.8% YoY.
- The company also declared a final dividend of Rs 17 per share for FY23.
- Infosys expects revenue growth to be in the range of 4-7% in constant currency for the financial year 2023-24 and operating margins are expected to be in the range of 20-22%.
- It added clients in the $1 million (922 from 912), $10 million (298 from 294) and $100 million (40 from 38) segments on a sequential basis.
- The number of $50 million-plus clients declined to 75 from 79 on a QoQ basis.
- Financial services sector revenue fell 1.7 percent YoY. Banking and financial services make for close to 26 percent of the total revenue.
- The manufacturing vertical saw the best growth at 22 percent.
Management Speak
Salil Parekh, CEO and MD of Infosys said, “Our strong performance in FY23 is a testimony to the continued focus on digital, cloud and automation capabilities which resonated with our clients. We have launched exciting programs with our clients leveraging generative AI platforms.”
Nilanjan Roy, Chief Financial Officer said, “Our continued focus on cost optimization and operational efficiencies have helped in achieving operating margins of 21.0% in FY23.
He added, “Free cash generation in Q4, led by robust collections, was strong. Executing on our capital allocation policy, we successfully completed the share buyback and have proposed a final dividend of ₹17.50 for FY23.”
ABOUT THE AUTHOR
Ketan Sonalkar (SEBI Rgn No INA000011255 )
Ketan Sonalkar is a certified SEBI registered investment advisor and head of research at Univest. He is one of the finest financial trainers, with a track record of having trained more than 2000 people in offline and online models. He serves as a consultant advisor to leading fintech and financial data firms. He has over 15 years of working experience in the finance field. He runs Advisory Services for Direct Equities and Personal Finance Transformation.
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