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India’s largest software exporter Tata Consultancy Services (TCS) reported a 22.6 per cent rise in its net profit for the quarter ended September 30 to ₹7,901 crore, largely backed by the rupee depreciation and improved business sentiment.
TCS’ second-quarter revenue rose 20.7 per cent YoY basis to ₹36,854 crore. In dollar terms, revenues rose 11.5 per cent to $5,215 million from the year-ago period. This is the first time in eight consecutive quarters that TCS has reported double-digit growth in revenues in constant currency terms.
“This has been a landmark quarter for us,” said MD and CEO Rajesh Gopinathan. “For two years, we have been on a journey to return to double-digit growth. Now that we have the numbers and the momentum, we are confident of continuing on the growth trajectory for the entire financial year.”
TCS, — the Tata Group’s biggest cash cow that typically stays away from giving any outlook, said today it is confident that this fiscal will end with a better momentum than in the previous ones.
Client additions
Large client wins (in retail and banking sectors), especially in the over-$100 million category, helped TCS grow rapidly during the quarter. Overall, It TCS saw client additions across all the key bands: four in the $100 million+ band, seven in $20 million+, 10 in $10 million+ band and 11 got added in the $l million+.
Digital revenues grew 59.8 per cent YoY. These accounted for 28.1 per cent of the overall revenues in Q2, against 25 per cent in Q1.
Rupee slide helps
TCS posted operating margins of 26.5 per cent, up 140 basis points. “The rupee depreciation helped our margins by 130 basis points, while the rest was helped by improving efficiencies within the organisation,” said V Ramakrishnan, CFO.
While employee growth has been sluggish across the industry, TCS added 10,227 employees on a net basis in Q2, the highest net addition in 12 quarters. Total employee strength at the end of Q2 stood at 4,11,102.
“Our investments in organic talent development and innovative employee engagement initiatives continue to deliver best-in-class HR outcomes,” said Ajoy Mukherjee, Executive Vice-President and Global Head, Human Resources.
“This quarter, we introduced yet another innovation, democratising the entry-level talent acquisition processes in India with the TCS National Qualifier Test."
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