TCS Achieves Record New Orders for the First Time in Company's History

Tata Consultancy Services (TCS) has unveiled its fourth-quarter fiscal year 2024 results, showcasing robust performance in a challenging market landscape. The Indian IT behemoth recorded a notable 9 percent increase in net profit, reaching Rs 12,434 crore for the January-March quarter. For the entire fiscal year, TCS witnessed a commendable surge in net profit, rising by 9 percent to Rs 45,908 crore. Moreover, the company's revenue also demonstrated a substantial uptick, climbing to Rs 2,40,893 crore from Rs 2,25,458 crore in the preceding year. TCS's resilient growth trajectory underscores its steadfast position in the global IT domain.

N G Subramanian, the Chief Operating Officer of the company who is set to retire, elucidated the fiscal challenges faced due to discretionary spending constraints impacting client revenues. He highlighted that while expenditure on non-discretionary sectors remains stable, discretionary spends has taken a hit. Discussing the order pipeline, Subramanian noted a record-breaking achievement with new orders reaching $13.2 billion, marking the highest in the company's history. Emphasizing the nature of these deals, he underscored that a significant portion consists of lower-value and short-term contracts, a strategic preference in the prevailing economic climate.

Without giving any specific commentary on his outlook on the deal pipeline, the CEO said all kinds of deals are available in the market and the company is chasing all of them. On the generative AI front, Subramaniam said it is getting embedded into virtually every contract that it is signing. TCS Chief Executive Officer and Managing Director K Krithivasan pegged the overall pipeline of exclusive Gen AI deals at $900 million. The company is engaged in 200 projects of various sizes and use cases on the new age technology, he said.

CEO Krithivasan addressed concerns about pricing amid various challenges in the company's key business sectors, asserting that TCS has maintained stability despite market headwinds. He noted that while there have been competitive pressures, TCS has successfully retained deal pricing over the past year, without experiencing any significant downward pressure. Krithivasan acknowledged the influence of competitive dynamics on pricing but expressed confidence that severe pricing pressures are unlikely, citing clients' awareness of the company's consistent pricing amidst high inflation.