TCS Q2 net profit down by 2 per cent to Rs 6,446 crore

Mail Today Bureau   New Delhi     Last Updated: October 13, 2017  | 00:00 IST
TCS Q2 net profit down by 2 per cent to Rs 6,446 crore

The country's largest software services exporter Tata Consultancy Services (TCS) on Thursday posted a 2 percent decline in second-quarter profit on Thursday, held back by sluggish growth in the banking and retail sector. The company's net profit fell to Rs 6,446 crore in the July- September down from Rs 6,586 crore in the same period of 2016-17.

All segments of the business, except the banking, financial services and insurance (BFSI) and retail sectors, grew revenue above 9.5 percent. BFSI accounts for more than 30 percent of TCS' revenues, while retail makes up about 13 per cent.

"In retail we're seeing a significant amount of traction. I think we should see a turnaround in retail in the next few quarters itself," Chief Executive Rajesh Gopinathan told reporters in Mumbai. Directionally it is positive but difficult to say when the turnaround in BFS is likely to happen."

The Mumbai-based company registered revenues at Rs 30,541 crore in the second quarter of 2017-18, up 4.3 per cent from Rs 29,284 crore in the year-ago period. The company has declared a dividend of Rs 7 per share. TCS, part of salt-to-software conglomerate Tata Group, said it added 1 client in $100 million-plus category and six clients in the $50 million-plus category. It added 15,868 employees in the quarter.

The company said earlier this year it would increase local hiring in the United States as it prepares for possible change in the visa system for Indian workers. Local brokerage Kotak said in a note to clients that TCS' "vulnerable maintenance-heavy portfolio" is likely to remain a risk.

It maintained a reduce rating on the stock. TCS is the first among India's software services exporters to report earnings for July-September. Smaller rival Wipro Ltd is scheduled to report next week. Shares in TCS closed 1.9 percent higher ahead of earnings in a broader Mumbai market that ended 1.1 per cent up.

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