TCS Q1 results: Profit rises 16.83% to Rs 11,074 crore; Rs 9 dividend announced

Tata Consultancy Services (TCS), the largest IT firm in terms of sales, on Wednesday reported a 16.83 per cent year-on-year (YoY) rise in net profit at Rs 11,074 crore for the June quarter compared with Rs 9,478 crore in the same quarter last year. The profit growth figure came largely in-line with analyst estimates of 15-20 per cent.

Revenue for the quarter came in at Rs 59,381 crore, up 12.55 YoY over Rs 52,758 crore in the same quarter last year.  Revenue growth in constant currency terms grew 7 per cent YoY, TCS said. 

Ebit margin for the quarter came in at 23.1 per cent, up 10 basis points YoY. That said margin contracted 130 basis points sequentially  due to salary hikes during the quarter. Deal wins for the quarter at $10.20 billion was also in-line with analysts' forecast of $10-11 billion.

TCS Q1 dividend The IT firm said its board has declared an interim dividend of Rs 9 per share of face value Re 1 each. The interim dividend would be paid on Monday, August 7, to the equity shareholders of the company, whose names appear on the register of members of the company or in the records of the depositories as beneficial owners of the shares as on Thursday, July 20,  which is the record date, fixed for the purpose, TCS said in a filing to BSE.  

Verticals, geographies 

In terms of industries, TCS said growth was led by Life Sciences and Healthcare which grew 10.1 per cent, followed by the manufacturing vertical that grew 9.4 per cent. BFSI grew 3 per cent, Retail and CPG 5.3 per cent, Technology & Services 4.4 per cent while Communications & Media grew 0.5 per cent.

Among major markets, the United Kingdom led the growth with 16.1 per cent rise; North America grew 4.6 per cent and Continental Europe grew 3.4 per cent. Among emerging markets, Middle East & Africa grew 15.2 per cent, India grew 14 per cent, Latin America grew 13.5 per cent, and Asia Pacific grew 4.7 per cent. 

TCS headcount, attrition

TCS said its workforce at the end of the quarter stood at 6,15,318, a net addition of 523 during the quarter. The workforce continues to be very diverse, comprising 154 nationalities and with women making up 35.8 per cent of the base, TCS said.

The company rolled out its annual salary increase across its workforce, with effect from April 1, 2023. Its investment in upskilling its workforce continues apace. Year till date, 103,000 employees were trained in high demand competencies and collectively, TCSers clocked 12.7 million learning hours, and acquired 1.3 million competencies. IT services attrition dipped further in Q1 and was at 17.8 per cent for the last twelve months.

TCS management say

Chief Executive Officer and Managing Director K Krithivasan said: “It is very satisfying to start the new fiscal year with a string of marquee deal wins. We remain confident in the longer-term demand for our services, driven by the emergence of newer technologies. We are investing early in building capabilities at scale on these new technologies, and in research and innovation, so we can maximize our participation in these opportunities.”

Chief Operating Officer and Executive Director N Ganapathy Subramaniam said TCS' products and platforms achieved major milestones during the quarter with several transformational engagements going live.

In the UK Life and Pensions administration space, he said the company signed three new deals on digital insurance platform, making TCS the undisputed leader in this market on any metric.

"We are proactively building differentiating capabilities in generative AI and actively working on such projects with our clients, delivering impact on technology, operations and client experience dimensions,” Krithivasan said.

 

 

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