IT major Tata Consultancy Services (TCS), India’s biggest software services company, today kicked off the earnings season by reporting a 10.8% rise in net profit, helped by a strong performance in its key banking, financial services and insurance segment. The Mumbai-headquartered company said its net profit for the quarter ended June 30 rose to ?8,131 crore from ?7,340 crore. The company reported an operating margin of 24.2%. Its revenue from digital rose 42.1% year-on-year, increasing its share to 32.2% of the total revenues. Analysts polled by Reuters had expected TCS to report a profit of ?7,824 crore.
TCS posted 11.4% rise in revenue to ?38,172 crore.
Here are the key highlights of TCS Q1 results:
Revenue at ?38,172 crore, +11.4% YoY
Net profit at ?8,131 crore, +10.8% YoY
Operating Margin at 24.2%
Digital revenue: 32.2% of total, +42.1% YoY
UK, Europe and India lead growth: +16% YoY. +15% YoY and +15.9% YoY respectively
Net addition of 12,356 employees – highest in 5 years
315K+ employees trained in digital technologies
361K+ employees in Agile methqds
IT services attrition rate at 11.5% LTM
Commenting on the Q1 performance, Rajesh Gopinathan, TCS’s CEO and MD, said: “We have had a steady start to the new fiscal year. We see customers continuing to spend on their growth and transformation initiatives, and that is showing in our strong order book and deal pipeline this quarter.”
“We are benefiting significantly from enterprises Investing in Customer Experience to differentiate themselves in a Business 4.0 world. Our lean forward strategy is working well and our customers are benefiting from the TCS’ innovation ecosystem,” he added.
TCS chief financial officer V Ramakrishnan said: “Our margins this quarter fully reflect the annual increments that we effected across the board in April. Sustained rigour in operations helped deliver strong cash conversion and EPS expansion.”
The earnings per share (EPS) was at ?21.67, up 13% year-on-year.
The board has recommended a dividend of ?5 per equity share for the June quarter. Shares of TCS today ended at ?2,131.45 apiece on the BSE, over 2 per cent lower from its previous close.