TCS Q1 profits goes down by 10% amid protectionist regulations in most markets
Claiming to have done well in a challenging environment, TCS chief executive and MD Rajeev Gopinathan quelled any fears of lay-offs.
- Jul 13, 2017,
- Updated Jul 13, 2017 7:41 PM IST
Tata Consultancy Services (TCS) registered a 10 per cent decline in their net profits in June quarter, taking their profits to Rs 5,945 crore against Rs 6,608 crore they posted in the last quarter. This decline in profits comes when Indian IT sector is battling protectionist regulations in most of the markets it outsources work to.
Analysts on average expected the company to post consolidated profit of Rs 6181 crore, according to Thomson Reuters data.TCS, the biggest IT firm in India, posted total income to the tune of Rs 29,584 crore in June quarter as opposed to Rs 29,642 crore in the March quarter, down 0.19%.
In a challenging operating environment we have had a fairly steady performance, stated Rajesh Gopinathan, CEO and MD, TC while addressing the Earnings Conference on Thursday. From profitability perspective also we have had a fairly stable profitability except for two factors - one seasonal and one external, he added
"We have seen steady growth across industries in Q1. Robust volumes from major markets driven by good client additions across revenue bands and accelerating Digital adoption from customers have given us the right start to the year," said TCS CEO and MD.
Easing any doubts in the minds of his employees, Gopinathan refuted any sackings in coming days. "There will be no layoffs. We are committed to grow the business in UP, & are consolidating operations in Noida," the company said in a statement.
Company's largest market in North America grew at a rate of 1.7 per cent and Europe became the standout market in this quarter.
"We have experienced broad based growth across Europe, growing at about of 5.6%. Almost every large market segment inside Europe has delivered very good growth with Germany, Nordics, and even France registering decent QoQ growth," said Gopinathan.TCS also reported 11 large deals with them being almost evenly spread across all the verticals. Major verticals have contributed at least 2 deals each out these eleven.
"In BFSI we're seeing a strong demand from the bottom of the pyramid, as new entrants are coming into the sector."
The TCS board of directors of TCS declared an interim dividend of Rs 7 per share to its shareholder.
"During the quarter high currency volatility including sharp rupee appreciation against the dollar resulted in Rs 650-crore loss in reported revenues. We remain disciplined in our financial management; stay focused on generating strong cash flows and invests in our digital business. Despite the impact of wage hike in Q1, we continue to drive profitability to our targeted range," said V Ramakrishnan, chief financial officer.
The TCS stock closed 0.20 points or 4.95 percent higher at Rs 2444 level on the BSE.
The TCS stock has so far gained 3.41 per cent this year compared with a 20.32 per cent surge in the Sensex.
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Tata Consultancy Services (TCS) registered a 10 per cent decline in their net profits in June quarter, taking their profits to Rs 5,945 crore against Rs 6,608 crore they posted in the last quarter. This decline in profits comes when Indian IT sector is battling protectionist regulations in most of the markets it outsources work to.
Analysts on average expected the company to post consolidated profit of Rs 6181 crore, according to Thomson Reuters data.TCS, the biggest IT firm in India, posted total income to the tune of Rs 29,584 crore in June quarter as opposed to Rs 29,642 crore in the March quarter, down 0.19%.
In a challenging operating environment we have had a fairly steady performance, stated Rajesh Gopinathan, CEO and MD, TC while addressing the Earnings Conference on Thursday. From profitability perspective also we have had a fairly stable profitability except for two factors - one seasonal and one external, he added
"We have seen steady growth across industries in Q1. Robust volumes from major markets driven by good client additions across revenue bands and accelerating Digital adoption from customers have given us the right start to the year," said TCS CEO and MD.
Easing any doubts in the minds of his employees, Gopinathan refuted any sackings in coming days. "There will be no layoffs. We are committed to grow the business in UP, & are consolidating operations in Noida," the company said in a statement.
Company's largest market in North America grew at a rate of 1.7 per cent and Europe became the standout market in this quarter.
"We have experienced broad based growth across Europe, growing at about of 5.6%. Almost every large market segment inside Europe has delivered very good growth with Germany, Nordics, and even France registering decent QoQ growth," said Gopinathan.TCS also reported 11 large deals with them being almost evenly spread across all the verticals. Major verticals have contributed at least 2 deals each out these eleven.
"In BFSI we're seeing a strong demand from the bottom of the pyramid, as new entrants are coming into the sector."
The TCS board of directors of TCS declared an interim dividend of Rs 7 per share to its shareholder.
"During the quarter high currency volatility including sharp rupee appreciation against the dollar resulted in Rs 650-crore loss in reported revenues. We remain disciplined in our financial management; stay focused on generating strong cash flows and invests in our digital business. Despite the impact of wage hike in Q1, we continue to drive profitability to our targeted range," said V Ramakrishnan, chief financial officer.
The TCS stock closed 0.20 points or 4.95 percent higher at Rs 2444 level on the BSE.
The TCS stock has so far gained 3.41 per cent this year compared with a 20.32 per cent surge in the Sensex.
Also watch: