BENGALURU: Tata Consultancy Services (TCS) reported a 12.1% revenue growth rate in the third quarter on a constant currency basis, a number that has doubled in the span of a year, helped by growth in all sectors, but specifically the banking, financial services insurance (BFSI) segment in North America. The growth was the highest in 14 quarters.
During the same period last year, the Rajesh Gopinathan-led company reported a constant currency growth of 6.2% and this number has been on an upward trajectory ever since, helping India’s biggest IT services company to widen the gap with rivals like Infosys and Wipro. Constant currency discounts the effect of currency volatility over which companies have no control. Even sequentially, the latest quarter — a traditionally weak one due to the holiday season — was better from the company perspective, registering 1.8% growth compared to 1.3% a year earlier. Total revenue in the quarter was $5.2 billion.
The results were announced after the stock market closed. So, the market response will be known only on Friday. The company’s share price has risen 35% in the last one year.
“It is a fairly strong quarter in a seasonally weak period,” CEO Gopinathan said, adding that BFSI in North America was a major growth accelerator, which offset the weakness faced by the sector in Europe due to Brexit. Retail consumer packaged goods was also a growth driver, helped by a strong holiday season.
For quite some time, BFSI was a drag for all Indian IT services providers as banks withheld spending due to regulatory concerns. That cloud seems to have been lifted with growth fuelled by moves towards API-fication (tech that allows an organisation to share information), micro services, cloud and cloud migration of applications. “From a domain stand point, payments, trading and adoption of blockchain for settlements is pushing growth,” chief operating officer N G Subramaniam said.