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TCS Q1 results: Profit falls 14% to Rs 7,008 crore; revenue rises marginally

TCS Q1 results: The IT major posted 0.4 per cent growth in revenue at Rs 38,322 crore in Q1 FY21 as compared to Rs 38,172 crore in Q1 FY20

Chitranjan Kumar | July 9, 2020 | Updated 18:58 IST
TCS Q1 results: Profit falls 14% to Rs 7,008 crore; revenue rises marginally
Ahead of Q1 results, shares of TCS closed trade at Rs 2,204.35, down 13.30 points, or 0.60 per cent on the BSE on Thursday

Tata Consultancy Services (TCS), the country's largest software exporter, on Thursday reported a 13.8 per cent year-on-year decline in its consolidated net profit at Rs 7,008 crore for the first quarter ended June 30, 2020 (Q1 FY21) as business was disrupted by coronavirus pandemic.

The Mumbai-headquartered company had posted consolidated net profit of Rs 8,131 crore in the same quarter of financial year 2019-20, TCS said in a regulatory filing.

The IT major posted 0.4 per cent growth in consolidated revenue at Rs 38,322 crore in Q1 FY21 as compared to Rs 38,172 crore in Q1 FY20. Revenue in constant currency terms fell 6.3 per cent YoY.

Industry wise, revenue growth for FY20 was led by life sciences and healthcare business, which continued to grow strongly at 13.8 per cent YoY. Other than that, all other industry verticals showed declines of varying degrees: BFSI (-4.9 per cent), Retail & CPG (-12.9 per cent), Communications & Media (-3.6

per cent), Manufacturing (-7.1 per cent) and Technology & Services (-4 per cent).

In terms of markets, demand contraction was broad-based by geography. Other than Europe (2.7 per cent) and Latin America (0.2 per cent), growth declined in all other markets: North America (-6.1 per cent), UK (-8.5 per cent), India (-27.6 per cent), Asia Pacific (-3.2 per cent), and MEA (-11.7 per cent).

Commenting on the Q1 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: "The revenue impact of the pandemic played out broadly along the lines we had anticipated at the start of the quarter. It affected all verticals, with the exception of Life Sciences and Healthcare, with varying

levels of impact. We believe it has bottomed out, and we should now start tracing our path to growth."

"After an initial period of disruption, customer have now stabilised their operations and are now embarking on new beginnings to adapt and thrive in a post-pandemic world. We are seeing many customers focus on front-end transformation, resulting in significant traction for our products and services," he added.

As on June 30, 2020, consolidated headcount of the company stood at 4,43,676, of which women constituted 36.2 per cent. TCS continues to be the global industry benchmark in talent retention, with the IT Services attrition rate (LTM) at 11.1 per cent, it said.

"The workforce continues to be very diverse, comprising 146 nationalities and with women constituting 36.2 per cent of the base," it added.

TCS' board has declared an interim dividend of Rs 5 per equity share of Rs 1 each of the company, which shall be paid on July 31, 2020 to the equity shareholders of the company. July 17, 2020 has been fixed as Record Date for the purpose.

Ahead of earnings announcement, shares of TCS closed trade at Rs 2,204.35, down 13.30 points, or 0.60 per cent on the BSE on Thursday.

Also Read: TCS Q1 preview: Revenue seen falling 5% amid coronavirus crisis; eyes on guidance for Q2

Also Read: TCS trades muted ahead of earnings, check what analysts expect

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