Tata Consultancy Services, India’s largest information technology (IT) services exporter, reported 2.1% fall in its second quarter net profits to Rs 6446 crore led by sluggish growth in banking and retail sector.
India’s most valued firm by market capitalisation declared a dividend of Rs 7 per share as its revenues increased 4.3% to Rs 30,541 crore.
Commenting on the Q2 performance, Rajesh Gopinathan, CEO and MD, said, “We experienced robust volume growth in Q2, driven by good demand across multiple industry verticals. Strong, broad-based client metrics this quarter demonstrates our increasing success with newer customers. Large deal wins this quarter, a good pipeline, and bottoming out of the Retail sector softness positions us well.”
TCS operating profit margins for the September quarter expanded 170 basis points on a sequential basis to 25.1%
“We continue to gain share in the fast growing Digital spend of our customers, evident in our industry-leading Digital growth in Q2. By sharpening our focus on individual components of the Digital service stack, we have been able to bring to bear the full power of our contextual knowledge, research and innovation, and investments in location-independent agile, automation and cloud on our customers’ transformational imperatives and become a trusted partner in their Business 4.0 journeys,” Mr. Gopinathan added.
TCS' digital revenue saw an increase of 31% year- on-year and accounted for 19.7% of the company's revenues.
N. Ganapathy Subramaniam, Chief Operating Officer & Executive Director anticipates better growth going forward. “With the sectoral headwinds slowly abating, we expect steadier and stronger growth ahead,” said Mr. Subramaniam.
The company added 28 clients in $1 million plus band. The IT major added 15,868 employees during the quarter on gross basis taking its total number of employees to 3,89,213 as of September 30.
V. Ramakrishnan, Chief Financial Officer believes that TCS investment program remains geared for growth. "Our Continued investments in digital design and transformational capabilities are paying off, and it shows in the strong growth in our Digital business,” said Ramakrishnan.
TCS shares on BSE closed up 1.92% at Rs 2548.55 in a firm Mumbai market on Thursday. The company has fixed October 26 as the record date for payment of dividend.
"EBIT margin, came in at 25.1% V/s 24.1% expected, a QoQ expansion of 1.7%, much better than expected on back of good volume growth," said Ms Sarabjit Kour Nangra, VP, Research -IT at Angel Broking maintaining a neutral rating on the stock.
