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TCS reported a sequential revenue growth of 1 per cent in dollar terms. Though the management sounded optimistic about the outlook, there is no weight in it.
The company’s revenue growth has continued to slim. After a 2 per cent sequential growth in constant currency in the June quarter, growth slipped to 1.7 per cent in the September quarter and to an even lower 1.3 per cent in December quarter.
In terms of year-on-year growth, in the December quarter, revenue was up 6.5 per cent, slipping from a growth of 7.1 per cent in the September quarter.
BFSI — the company’s largest segment — continued to witness pressure.
The segment saw revenue drop 1.5 per cent sequentially on a constant currency basis.
It looks like the company has not been able to secure any meaningfully large deal in the space.
The year-on-year growth here was a mere 0.2 per cent.
One possible reason for the sluggishness in the BFSI space in the US, could be the uncertainty on business and regulations that the clients are facing.
The financial sector deregulation that was expected last year itself after Donald Trump was elected US President, is still is hanging in the air.
Among geographies, North America, the largest for the company, continued to be downbeat.
The geography recorded a growth of 1.5 per cent, sequentially in constant currency terms.
There was no new client addition in the $100-million-plus bucket.
In 2017-18, TCS will be missing Nasscom’s 7-8 per cent growth target for the industry.
There was only one positive in the result — the green shoots in the retail sector. The segment which contributes 12 per cent to revenue, saw a growth of 6.4 per cent in constant currency terms.
There were expectations that the company would expand its operating profit margins by at least 30-40 basis points in the December quarter helped by productivity improvements, but there was disappointment in this too. The company reported its margin at 25.2 per cent, up only slightly from 25.1 per cent in the September quarter.
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