The country's largest IT services provider Tata Consultancy Services on July 8 reported a consolidated profit of Rs 9,008 crore for the quarter ended June 2021, registering a 2.6 percent sequential decline due to lower other income, and missing analysts' expectations.
The year-on-year growth in consolidated profit was 28.5 percent during the quarter. Other income declined sharply by 22.6 percent QoQ to Rs 721 crore in Q1FY22.
TCS said the revenue from operations grew by 3.9 percent sequentially to Rs 45,411 crore in the quarter ended June 2021, and the year-on-year growth was a massive 18.5 percent.
Numbers missed analysts' expectations on all counts. Profit was estimated at Rs 9,352 crore on revenue of Rs 45,777 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.
"Our business in North America, BFSI and Retail all showed an appreciable growth which underlines the resilience of our operating model, relevance of offerings and above all, the passion and dedication of our associates," said Rajesh Gopinathan, Chief Executive Officer and Managing Director.
He further said, "Given the variants of the virus and fears of a potential third wave, we are watchful of the emerging situation and remain optimistic of the opportunities in our core markets and verticals."
The company registered a 2.8 percent sequential growth in revenue in dollar terms (at $6,154 million) and 2.4 percent in constant currency, missing the CNBC-TV18 poll estimates which was pegged at 3.6 percent and 3.3 percent respectively.
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director said TCS once again had a superior quarter with a total contract value (TCV) of $8.1 billion which is broad-based across markets and verticals. The company had signed $9.2 billion deals in Q4FY21.
All verticals showed good sequential as well as YoY growth. "Growth continued to be led by Life Sciences and Healthcare that grew 7.3 percent QoQ and 25.4 percent YoY," said TCS in its BSE filing.
The IT giant further said Retail and Consumer Packaged Goods (CPG) segment also bounced back to double-digit growth, growing 4.4 percent QoQ and 21.7 percent YoY.
"Other segments also saw significantly improved performance - BFSI segment grew by 3.1 percent QoQ & 19.3 percent YoY; manufacturing rose by 4.8 percent QoQ and 18.3 percent YoY; and Technology & Services registered a 5 percent QoQ and 12.3 percent YoY growth, and and Communications & Media vertical grew by 1.7 percent QoQ and 6.9 percent YoY.
Among markets, North America business grew by 4.1 percent QoQ and 15.8 percent YoY, and United Kingdom registered a 3.6 percent sequential growth and 16.3 percent yearly growth. Continental Europe revenue rose 1.5 percent QoQ and 19.7 percent YoY, and Latin America grew 4 percent QoQ and 16.1 percent YoY, while Middle East & Africa registered a 4.2 percent QoQ and 25.3 percent YoY growth.
The pandemic's second wave impacted sequential growth in India and Asia Pacific, said TCS. India registered a 14.1 percent sequential decline and 25.3 percent year-on-year increase, while Asia Pacific business grew 2.4 percent QoQ and 9.3 percent YoY.
The IT firm said strengthening demand across growth and transformation themes drove accelerated demand across multiple service lines. "Growth in the quarter was led by cloud platform services, cyber security, analytics & insights and enterprise application services."
At the operating level, too, numbers missed analysts' expectations. Consolidated earnings before interest and tax (EBIT) fell 1.2 percent quarter-on-quarter to Rs 11,588 crore and margin declined 133 bps QoQ to 25.52 percent impacted by wage hikes, against CNBC-TV18 poll estimates of Rs 11,803 crore and 25.78 percent respectively.
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IT services attrition rate in last twelve months at 8.6 percent was the lowest in the industry, said TCS, adding there was highest ever quarterly net headcount addition of 20,409, taking total workforce strength to 5,09,058 as of June 2021.
The IT services firm announced an interim dividend of Rs 7 per share.
The stock price closed at Rs 3,257.10 on Thursday, down 0.56 percent on the BSE.
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