Tata Consultancy Services reported a profitable fourth quarter in the last fiscal and has decided to pass on the gains to its employees. The Indian tech major has given a 120 per cent payout of the target variable pay for its employees after estimate defying Q4 results. The company has also announced a salary hike of two to six per cent depending on the geography.
"We have given low single digit wage hikes in the developed markets and high single-digit hikes in developing markets, with high performers getting increases at the higher end of those bands," TCS MD and CEO Rajesh Gopinathan said.
This is reportedly the first time in two years that the TCS has offered higher variable pay to its employees. The salary hike is effective from April 1. TCS has also announced 1:1 bonus of shares and a dividend of Rs 29 per share. This means that the total payout to shareholders will now be Rs 50 for the year. TCS has reportedly handed out around Rs 26,000 crore to the shareholders in dividends and bonuses in the year.
Moreover, TCS stock reached a fresh 52-week high of 3,421 level following expectations from company that it will register double-digit growth during FY19 after opening at 3,250. The stock closed at 3,406.40, up 6.76 per cent on BSE. The market capitalisation of the firm increased to Rs 6,52,082 crore on BSE.
The biggest software exporter of India reported 4.4 per cent growth in net profit at Rs 6,904 crore during the March quarter of financial year 2017-18. TCS posted a revenue growth of 8.2 per cent at Rs 32,075 crore during the quarter that ended on March 31. In dollar terms, the company had its highest revenue growth in 14 quarters at 11.7 per cent. For the fiscal year 2017-18, the company saw its net profit slip 1.7 per cent to Rs 25,826 crore, while its revenue grew 4.3 per cent to Rs 1.23 lakh crore.
"To some extent (it has been) a sobering year that it is both a time of optimism as well as the fact that the year has actually been lower (on revenue growth) than in the recent past," Gopinathan said.
The TCS chief executive also mentioned that the company is moving in the right direction and will achieve the expected double-digit growth in dollar revenue in FY19. For Q4FY19, TCS registered the highest ever quarterly growth in its dollar revenue at $185 million.
The company saw its operating margins at 25.4 per cent, but Gopinathan said the company is looking to reach the 26-28 per cent level which eluded across the four quarters of FY18. After remaining "soft" for much of the year, banking and finance sector along with the North America businesses, the largest revenue contributors from a sectoral and geographical perspectives, are showing some optimism, he said.