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TCS Q1 Results Highlights: Tata Consultancy Services released its results for the first quarter of financial year 2022-23 on July 8. The company's revenue jumped by 16.7 percent YoY to Rs 52,758 crore, where, the net profit climbed by 5 percent YoY to Rs 9,478 crore.
The company said its constant currency (cc) revenue growth was at 15.5 percent year-on-year (YoY). Operating margin was at 23.1 percent, registering a contraction of 2.4 percent YoY.
TCS announced a dividend of Rs 8 per share, which will be credited by August 3, 2022. The record date for the same is July 16, 2022.
IT services attrition continued to climb and was 19.7 per cent on the last twelve months’ basis. In the March quarter, it was at 17.4 per cent. Net headcount addition - which many believe to be leading indicator of future demand - during the period was 14,136, much lower than 35,209 employees in previous quarter. The company gradually accelerated its return to office program in Q1, with about 20 per cent of the workforce now working from office.
The deal win also declined to $8.2 billion during the quarter from $11.3 billion in the previous quarter. The firms said it added nine new clients to the $100 million+ band YoY and 19 clients to the $50 million+ band.
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Tata Consultancy Servicessaw attrition for the Q1FY23 come in at 19.7 percent on a last twelve-month basis, which is the highest in the last six quarters. It is up from 17.4 percent in Q4FY22. TCS added 14,136 employees in the first quarter of FY23, taking its headcount to over 6 lakh. On a year-on-year basis, its net addition numbers were down from 24,000 in Q1FY22 to 14,000 in Q1FY23. Read full report
"Looking into the next three or four quarters, North America will be the strongest driver, in terms of growth perspective,"TCS CEO RajeshGopinathan said, in response to a query during the earnings call.
The deal conversion cycle remains "normal", TCSChief Operating OfficerN Ganapathy Subramaniam said during the earnings call, adding that the company does not see anamolies.
The pricing realisation will be on "case by case basis", TCS' Chief Financial OfficerSamir Seksaria said during the earnings call.CEO RajeshGopinathannoted that margins should start looking up from next quarter.
"We continue to add employees to build capacity for long term growth," TCS CEO Rajesh Gopinathan said, during the earnings conference call.
Stay tuned for the latest updates from the earningscall at 5:30 pm.
“It has been a challenging quarter from a cost management perspective. Our Q1 operating margin of 23.1% reflects the impact of our annual salary increase, the elevated cost of managing the talent churn and gradually normalizing travel expenses. However, our longer-term cost structures and relative competitiveness remain unchanged, and position us well to continue on our profitable growth trajectory," company'sChief Financial OfficerSamirSeksariasaid.
The workforce of TCS has crossed the milestone of 6 lakh, with the total headcount as of June 30, 2022, stated to be606,331. The net headcount addition during the quarter was 14,136.
“We are pleased with our execution during the quarter wherein we successfully delivered several transformation programs. The TATA CONSULTANCY SERVICES Building on belief For 1rnrnerl1ate use Press Release Page 2 of 11 investments we made on people, upskilling efforts and select lateral hiring et al helped manage the talent turnover with minimum impact on our operations. During the quarter, we have resumed in-person meetings, and hosted several clients at our facilities. We are bringing in more of our associates back to our development centres, and it is steadily increasing at all levels. On the sustainability front, we have signed our commitment to SBTi version 5 standards during the quarter and are making steady progress towards our net zero journey with tremendous alignment to this initiative across our associates,"N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, said
"We are starting the new fiscal year on a strong note, with all-round growth and strong deal wins across all our segments. Pipeline velocity and deal closures continue to be strong, but we remain vigilant given the macro-level uncertainties. Our new organization structure has settled in nicely, getting us closer to our clients and making us nimbler in a dynamic environment. Looking ahead, we remain confident in the resilience of technology spending and the secular tailwinds driving our growth,"Rajesh Gopinathan, TCS Chief Executive Officer and Managing Director, said.
There was strong, broad-based demand across the different services, led by Cloud, Consulting & Service Integration, Cognitive Business Operations and Enterprise Application Services. Key themes driving G&T demand in Q1 were customer experience, cloud transformation and sustainability, TCS said.
