TCS Q1 Results: Net Profits Jumps 28.5% to Rs 9,008 Cr, Rs 7/Share Dividend Announced

Business

Tata Consultancy Services (TCS), India’s biggest software services exporters, on Thursday posted 28.5 per cent year-on-year (YoY) rise in consolidate net profit to Rs 9,008 crore for the quarter ended on June 30. The IT behemoth posted ₹7,008 crore profit for the corresponding quarter last year.

TCS net revenue rose 18.5 per cent year-on-year to Rs 45,411 crore. The revenue in constant currency terms witnessed a growth of 16.4 per cent on year-on-year basis.

Commenting on TCS’ Q1 performance, Rajesh Gopinathan, chief executive officer and managing director, said, ““I am humbled that in a personally challenging quarter to many, TCSers demonstrated phenomenal character in helping each other, be meaningful to the communities and delivered on our commitments to clients.”

“All verticals showed good sequential as well as YoY growth. Growth continued to be led by Life Sciences and Healthcare (+7.3% QoQ, +25.4% YoY). Retail and CPG also bounced back to double digit growth, growing 4.4% QoQ and 21.7% YoY. BFSI (+3.1% QoQ, +19.3% YoY), Manufacturing (+4.8% QoQ, +18.3% YoY), Technology & Services (+5% QoQ, +12.3% YoY) and Communications & Media (+1.7% QoQ, +6.9% YoY) also saw significantly improved performance,” the Bengaluru-bases company said in the regulatory filing.

“On that backdrop, our business in North America, BFSI and Retail all showed an appreciable growth which underlines the resilience of our operating model, relevance of our offerings and above all, the passion and dedication of our associates. Given the variants of the virus and fears of a potential third wave, we are watchful of the emerging situation and remain optimistic of the opportunities in our core markets and verticals. We are well positioned and operating diligently to participate in them aggressively,” he added.

The Covid-19 pandemic second wave impacted sequential growth in India and Asia Pacific, said TCS. India registered a 14.1 per cent quarter-on-quarter decline and 25.3 per cent year-on-year increased, while Asia Pacific business grew 2.4 per cent sequentially and 9.3 per cent on year.

TCS declared an interim dividend of ₹7 per equity share of ₹1 each of the company.

The IT giant won order worth $8.1 billion in the June quarter, a 17.3 per cent year-on-year increase. “We once again had a superior quarter with a TCV of $8.1 billion which is broad based across markets and verticals. Our G+T themes are seeing traction in the market place,” said N Ganapathy Subramaniam, chief operating officer.

India’s largest IT services firm added 20,409 employees in the quarter ending June 2021, highest ever in a quarter. The company registered an attrition rate of 8.6 percent, the lowest in the industry. “We overcame the challenges posed by the second wave of Covid-19 in India taking some practical approaches and am satisfied that the delivery of all our client engagements was kept on track,” N Ganapathy Subramaniam said.

Samir Seksaria, chief financial officer, said, “We crossed the $6 billion milestone in quarterly revenue this quarter. In addition to our annual salary increase and promotions, we undertook one of the largest vaccination drives in the private sector. Despite this and headwinds in regional markets, we expanded our Q1 operating margin year on year, reflecting the inherent resilience of our business model.”