IT major Tata Consultancy Services’ profit rose by 8.7 per cent to ₹11,380 crore in the second quarter of FY24, compared with ₹10,465 crore it reported in the corresponding period last year. On a sequential basis, the profit was up by 2.33 per cent, from ₹11,120 crore in Q1 FY24. The board also approved a share buyback up to Rs 17,000 crore at the price of ₹4,150 per share, a 15 per cent premium on the current stock price.

The company also declared an interim dividend of ₹9 per equity share of ₹1 each.

Performance in this quarter was below street estimates as macroeconomic uncertainties continued to loom. Softness in North America continued, seeing a growth of only 0.1 per cent year on year. Europe also saw a minimal growth of 1.3 per cent. TCS CEO K Krithivasan stated that countries like Germany and France continue to show slow growth within the continent. The management further added that the ongoing Israel-Palestine conflict will have a minimal impact on the business. TCS has 250+ employees, many of whom are of Indian origin and stationed in Israel. “I salute all the employees in Israel; they are staying put and servicing our clients; we are in touch with them,” said N Ganapathy Subramaniam, COO of TCS.

The IT major’s revenue from operations rose 7.9 per cent to ₹59,692 crore, compared to ₹55,309 crore in the corresponding period last year. The operating margin saw a nominal expansion of 0.3 per cent year-on-year at 24.3 per cent.

BFSI, which contributes to nearly half of TCS’ revenues, saw a degrowth of 0.5 per cent. The UK region, however, posted 10.7 per cent growth.

The order book stood at around $11.2 billion for the quarter. This is the third consecutive quarter that TCS reported over $10 billion in order book. TCS also updated and increased its quarterly order book guidance to $9–10 billion. The BSNL deal was included in the order book this quarter, and the management expects to complete the rollout of BSNL’s 4G and 5G networks in the next 9–12 months.

With the macroeconomic pressures continuing, cost optimisation and deferment on the execution of projects still continue.

Hiring trend

Attrition in LTM IT services continues to abate, at around 14.9 per cent in Q2, from 17.8 per cent reported in the previous quarter. TCS reported a significant headcount decline of 6,333; with this, the company’s headcount stood at 608, 985. Last quarter, the company added 523 employees to its headcount. However, the headcount for the company has been declining for two consecutive quarters.

In a statement, Chief Human Resources Officer Milind Lakkad said the company’s strategy to hire freshers and train them is paying off.

“Our strategy of proactively hiring bright freshers and investing in training them with the right skills is paying off. With that talent coming on stream and with reduced attrition, we were able to recalibrate our gross additions, keeping them below the departures during the quarter, driving up productivity and enhancing project outcomes,” he said.

The company also said an investigation related to the ‘jobs for bribe’ scandal has been completed and actions taken against some employees.  Staffing firms were allegedly involved in bribing senior executives overseeing recruitment processes in the company.