TCS Q2 net rises 13.2% to Rs5,244 crore

Tata Consultancy Services (TCS), the country's largest software services firm, on Thursday reported a 13.2-per cent increase in its quarterly net profit at Rs5,244 crore and a 13.5-per cent year-on-year increase in consolidated revenue at Rs23,816 crore for the July-September quarter this fiscal from Rs22,111 crore for the previous quarter.

The Mumbai-based software and consultancy firm, which had posted a net profit of Rs5,568 crore in the previous quarter of the current financial year, attribute the 5.8 per cent sequential fall in profit to lower margins, which slipped by 0.07 per cent, or 7 basis points, to 22 per cent on an annual basis.

Operating profit for the quarter stood at stood Rs6,394 crore, a growth of 10 per cent quarter-over-quarter while operating margin stood at 26.8 per cent.

TCS will pay a dividend of Rs27 per share of Rs5 face value

During the July-September quarter, the company added 20,350 employees taking the total headcount to 313,757. The company also crossed the milestone of employing 100,000 women professionals.

''Driven by strong volumes and robust utilisation rates, this has been a quarter of steady, consistent performance. Our well-rounded showing has been highlighted by broad-based growth in our key markets, industries and services as we continued to deepen our engagement with customers,'' chief executive and managing director N Chandrasekaran said.

''Our customers are focused on using Digital technologies to reimagine their business in multiple dimensions and with our significant investments as well as deep capabilities in these areas, we remain well positioned to act as a catalyst and enable their business innovation across the enterprise,'' he added.

''We remain focused on supporting business growth by optimising our operations and maintaining margins in our desired range. Our cash generation has been strong resulting in high cash conversion ratios and we continue to make investments for the business growth,'' Rajesh Gopinathan, chief financial officer, added.

TCS said growth in Q2 was broad-based with all industries growing on a sequential basis. The impact of the integration of newly merged entity in Japan also provided additional growth to units like manufacturing, hi-tech.

All core markets like North America, Europe and UK grew smartly. Emerging markets continued to be volatile with India growing while Latin America faltered in Q2. There was balanced growth across IT and other service lines led by infrastructure services and engineering services.

Exports by India's IT outsourcing sector are expected to rise 13-15 per cent in the current financial year, according to the National Association of Software and Services Companies, as an improving global economy encourages banks and companies to boost spending on technology.