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Five takeaways from TCS' second-quarter earnings

The IT firm's revenue growth missed forecasts, while volume growth met expectations. The TCS stock is likely to open stronger in Wednesday's trade reacting to largely positive quarterly data.

BT Online        Last Updated: October 13, 2015  | 21:00 IST
Five takeaways from TCS' second-quarter earnings
The TCS stock is likely to open stronger in Wednesday's trade reacting to largely positive quarterly data.

Country's largest software services firm Tata Consultancy Services (TCS) on Tuesday reported its financial results largely in line with the expectations for the quarter ended September 30. The IT firm's revenue growth missed forecasts, while volume growth met expectations.
The TCS stock is likely to open stronger in Wednesday's trade reacting to largely positive quarterly data.

Here are five takeaways from IT giant's Q2FY16 numbers:

1) Revenue growth
The company reported a 3.9 per cent sequential revenue growth in the constant currency terms quarter-on-quarter, missing analysts' expectations and lagging behind rival Infosys, which reported six per cent sequential growth. Revenues grew 5.8 per cent q-o-q to Rs 27,165 crore, and 14.1 per cent on a year-on-year basis.

2) Net profit
The company reported a 16 per cent surge in net profit to Rs 6,084.66 crore for the quarter ended September 30. The Mumbai-based firm had reported a profit of Rs 5,244.28 crore in the corresponding period last fiscal, it said in a regulatory filing.

3) Dividend
The company declared a second interim dividend of Rs 5.50 per equity share of Rs 1 each of the company. The IT major has fixed October 26, 2015 as the record date for the purpose of payment of dividend, which will be paid out on October 30, 2015.

4) Attrition
Employee attrition rate (last twelve months) was 16.2 per cent including business process services in Q2FY16. "We expect attrition to come down in Q3 and Q4," said Natarajan Chandrasekaran, CEO and MD, TCS, adding attrition was lower in absolute numbers and it has been on declining trend since July.

5) Operating margin and operating profit
TCS reported an operating margin of 27.1%, an improvement of 78 basis points sequentially, while it posted 8.7 per cent sequential growth in operating profit to Rs 7,307 crore, and 15.1 per cent on a year-on-year basis.

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