TCS Q1 results: Net profit rises 5.2% to Rs 9,478 cr, dividend declared

TCS Q1 results: Net profit rises 5.2% to Rs 9,478 cr, dividend declared

TCS said its revenue rose 16.17 per cent YoY to Rs 52,758 crore in June quarter from Rs 45,411 crore in the corresponding period last fiscal.

TCS Q1FY23 results declared TCS Q1FY23 results declared

IT services major Tata Consultancy Services (TCS) on Friday reported 5.2 per cent year-on-year (YoY) increase in consolidated net profit for the quarter ending 30 June, 2022 at Rs 9,478 crore as India's top IT exporter won more contracts from companies looking to digitise operations.

The company had reported a net profit of Rs 9,008 crore in the year-ago period. 

Sequentially, the net profit declined 4.5 per cent in Q1FY23 from Rs 9,926 crore in Q4FY22.

The company's revenue rose 16.17 per cent YoY to Rs 52,758 crore in June quarter from Rs 45,411 crore in the corresponding period last fiscal. The company's operating margin witnessed a contraction of 2.4 per cent at 23.1 per cent in June quarter, TCS said, with North America (19.1 per cent in CC) and retail (25.1 per cent CC) leading among segments.

Further, constant currency (CC) grew 15.5 per cent per cent YoY in the quarter under review. However, analysts have opined that a weaker euro and pound against the dollar had some affects on the growth.

In terms of employee headcount, TCS said that its workforce has crossed the 600,000 milestone. The current employee count stands at  606,331. Milind Lakkad, Chief HR Officer, said, “Following our annual compensation review, employees received salary increases of 5 to 8 per cent, with top performers getting even bigger hikes."

Graphic credit: Pragati Srivastava

In terms of work from office, TCS added that the company gradually accelerated its return to office program in Q1, with about 20 per cent of the workforce now working from office. Further, IT services attrition was 19.7 per cent on the last twelve months’ basis. 

Further, TCS added that in the Board Meeting held today, the Directors have declared an interim dividend of Rs 8 per equity share of Rs 1 each. record date is fixed on 16 July and the payment date is set as August 3, 2022.

Graphic credit: Pragati Srivastava

Commenting on the results, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said, “We are starting the new fiscal year on a strong note, with all-round growth and strong deal wins across all our segments. Pipeline velocity and deal closures continue to be strong, but we remain vigilant given the macro-level uncertainties. Our new organization structure has settled in nicely, getting us closer to our clients and making us nimbler in a dynamic environment. Looking ahead, we remain confident in the resilience of technology spending and the secular tailwinds driving our growth.”

N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, said: “... During the quarter, we have resumed in-person meetings, and hosted several clients at our facilities. We are bringing in more of our associates back to our development centres, and it is steadily increasing at all levels. On the sustainability front, we have signed our commitment to SBTi version 5 standards during the quarter and are making steady progress towards our net zero journey with tremendous alignment to this initiative across our associates.”

Samir Seksaria, Chief Financial Officer, said: “It has been a challenging quarter from a cost management perspective. Our Q1 operating margin of 23.1% reflects the impact of our annual salary increase, the elevated cost of managing the talent churn and gradually normalizing travel expenses. However, our longer-term cost structures and relative competitiveness remain unchanged, and position us well to continue on our profitable growth trajectory.”

Shares of TCS on Friday closed 0.67 per cent higher at Rs 3,264.85 apiece on BSE.