Tata Consultancy Services (TCS) reported results for the quarter ended September almost at par of analysts’ estimates led by robust volumes.
Ahead of the results, TCS closed 1.1 percent higher at Rs 3,935.65. It hit an intraday low of Rs 3,900.00 and a high of Rs 3,989.90.
We have collated a list of top ten takeaways from TCS Q2 results:
Net Profit- IT major Tata Consultancy Services’ second-quarter earnings were lower than analysts’ expectations by 1% as profit rose 7 percent sequentially to Rs 9,624 crore. TCS reported a net profit of Rs 9,008 crore in the previous quarter.
Profit was estimated at Rs 9,731 crore on revenue of Rs 47,466 crore for the quarter, according to an average of estimates of analysts polled by CNBC-TV18.
Total Revenues-Total revenues increased by 16.8 percent on a YOY basis to Rs 46,867 crore compared to Rs 40,126 crore reported in the same quarter last year. Revenue rose 3.0 percent on a QOQ basis.
Dividend Per Share-Tata Consultancy Services informed BSE that the Board of Directors of the company at its meeting held on October 8, 2021, have declared a Second Interim Dividend of Rs 7 per Equity Share of Re. 1 each of the Company based on the record date of October 19, 2021.
Further, the company has informed that the Second Interim Dividend will be paid to the equity shareholders of the Company on November 03, 2021.
Segment Revenue-There was not much difference in contribution of sectors to the revenue compared to previous quarter. BFSI remained the largest contributor to the revenue at 39% (40% previous quarter).
“We are using the growth tailwind to invest in strengthening relevant capabilities and building out a comprehensive portfolio of offerings that caters to a broader set of stakeholders in the enterprise across business cycles, strengthening our brand, and making our business more resilient.” Rajesh Gopinathan, CEO and MD TCS said.
The strong and sustained demand environment is a once-in-a-decade opportunity to position TCS as the preferred growth and transformation partner for its customers, he said. According to him, this is the most sustainable pathway to create longer term value for all its stakeholders.
Operating Margin-The operating margin remained flat 25.6 percent on a QoQ basis while it reduced marginally by 0.6% on a YOY basis.
Segment Growth-Strong double digit revenue growth on a YOY basis was visible across verticals in the September quarter.
Manufacturing vertical grew by (+21.7%), followed by Life Sciences and Healthcare (+19%), Retail and CPG (+18.4%) and BFSI (+17%). Communications & Media (+15.6%) and Technology & Services (+14.8%) witnessed accelerated growth
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said, “TCS BaNCS®, Quartz SmartLedgers™, TwinX™ and TCS Cognix™, all had marquee wins during the quarter and are increasingly driving business and operating model transformations in many markets.” He also added, “We are pleased with our overall delivery performance during the quarter, where several large complex programs across verticals went live”.
Market across geographies-North America grew the most among all markets at +17.4%. UK and Europe grew by +15.6% and +13.5% respectively. Among emerging markets, India led from the front and grew +20.1%, followed by Latin America +15.2%, Middle East & Africa +13.8% and Asia Pacific +7.6%.
Deal Wins and Patents-5 New Clients were added in $100Mn+ category taking the total customers to 54; 17 new clients in $50Mn+ category, taking the total to 114 clients in this bracket.
TCS has applied for 6,169 patents as at the end of 2nd Quarter, including 180 applied during the quarter, and has been granted 2,100 patents.
Human Resource-Total employee strength at the end of Q2 stood at 528,748 on a consolidated basis, with net additions of 19,690 employees during the quarter. Women make up 36.2% of the employee base.
Attrition Rate-The company continues to enjoy best in class employee retention rate. Though the attrition rate for the quarter jumped 3.3% to 11.9% from 8.6% in last quarter, it is still low compared to the industry.
“By focusing on organic talent development and by linking learning with careers, we have kept employee satisfaction levels high” said Milind Lakkad, Chief HR Officer. He also added that a record number of 43,000 fresh graduates were added in the last six months.