TCS — India’s largest IT firm — on Wednesday kicked off a new earnings season for India Inc. The Tata group IT giant’s standalone net profit declined 5.4 per cent sequentially, worse than analysts’ expectations.
Here are five key takeaways from the Tata group IT giant’s latest quarterly results:
Top and bottom lines
TCS registered a net profit of Rs 12,075 crore for the quarter ended September 30, as against a net profit of Rs 12,760 crore for the first three months of the financial year. That was short of analysts’ expectations.
According to Zee Business research, the Mumbai-based IT company was estimated to log a net profit of Rs 12,744 crore for the September quarter.
Tata Consultancy Services’ second-quarter revenue grew 3.7 per cent on a quarter-on-quarter basis to Rs 65,799 crore, according to a regulatory filing.
In constant currency terms — or revenue after removing the impact of forex fluctations — increased 0.8 per cent sequentially.
Zee Business analysts had pegged the IT firm’s top line at Rs 65,246 crore.
Growth in the IT major’s BFSI segment — contributing 32.2 per cent to its earnings — stood at 1.1 per cent.
By geography, revenue from North America expanded 0.8 per cent. The region contributed the maximum share of 48.8 per cent to the earnings.
Domestic revenue — 5.8 per cent over overall revenue — grew 4.0 per cent.
Operational performance
The company’s operating margin — a key measure of a company’s profitability — improved by 70 basis points (bps) on a quarter-on-quarter basis, to 25.2 per cent.
Deal wins
The company clinched $10 billion in total contract value (TCV) in the September quarter, marking an improvement over $9.4 billion for the previous three months.
Dividend
The IT major announced a dividend of Rs 11 per equity share — an 1,100 per cent payout given the face value of Re 1.
Management commentary
Describing the IT major’s quarterly performance as strong, TCS CEO and MD K Krithivasan said: “I would like to thank all our employees for their dedication and excellence. We are on a journey
to become the world’s largest AI-led technology services company. Our journey is anchored in bold transformation across talent, infrastructure, ecosystem partnerships and customer value.”
TCS CFO Samir Seksaria said the company achieved good growth momentum across all verticals during the three-month period. “Our disciplined execution helped us expand our margins while making strategic investments. We have prioritised wage hikes, building future-ready capabilities and establishing new ecosystem partnerships,” he said.
Seksaria also said that TCS’s financial resilience and robust balance sheet will support both its internal transformation initiatives and external investments.
ALSO READ: TCS Q2 Earnings: HR head Kunnumal shares AI vision; no mention of headcount amid layoffs!
TCS shares
Earlier on Thursday, the TCS stock rose 1.2 per cent to close at Rs 3,062 apiece on BSE.
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