BENGALURU: TCS reported a modest revenue growth of 3.4% in constant currency for the 2023-24 financial year, as challenges in North America and its mainstay banking and financial services sector persist.
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Although the growth is significantly lower than the previous year’s 13.7%, it surpasses Nasscom’s latest estimates for India’s IT exports growth of 3.3% in constant currency to $199 billion for the same period. The 2023-24 financial year was a near washout for Indian IT services in terms of growth and hiring.
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TCS CEO K Krithivasan expressed optimism about the 2024-25 financial year, stating, “FY25 will be better than FY24, and that’s the best guidance we have given,” at the earnings conference on Friday. He highlighted the new growth markets of India, Asia-Pacific, Middle East, Africa, and Latin America, especially noting revenue from India, which grew by 37.9% year-on-year. The UK grew by 6.2%, while North America decreased by 2.3% and Europe by 2%, reflecting the overall uncertainty in major markets. Banking, tech services, and communications and media continue to experience negative growth.
For the quarter ending March, TCS’s revenue grew 2.2% year-on-year in constant currency, with a sequential revenue growth of 1.1% in constant currency.
The company’s operating margin remained flat at 24.6% for the 2023-24 financial year, with a slight increase to 26% for the March quarter from 25% in the preceding quarter. TCS closed the last fiscal year with an impressive order book of $42.7 billion, securing $13.2 billion in the March quarter alone, representing a year-on-year growth of 32%.
For the first time, TCS’s management revealed that $900 million of the revenue came from generative AI.
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Krithivasan said that the company could have achieved an additional 50-100 basis points of growth, but the discontinuation of old programmes and slower ramp-up hindered faster growth.
