Tata Consultancy Services (TCS) reported a 16.8 percent increase in net profit on a year-on-year (YoY) basis in the quarter ended June 30, 2023, driven by a strong growth in total contract value (TCV) deal wins despite a tough business environment.
Consolidated revenue for the quarter came in at Rs 59,381 crore, marking an on-year surge of 13 percent. In constant currency terms, the revenue grew by 7 percent YoY.
In dollar terms, the revenue grew by 4 percent as against the previous quarter to $7,226 million, the company said in a release.
The numbers are in line with the muted estimates amid a weak demand environment. Sequentially, the country's largest software services exporter grew by a modest 0.4 percent, which is its slowest growth in the last 12 quarters. The net profit declined by 3 percent as against the March quarter.
Live: Catch all the updates from TCS' earnings report and press briefing
TCS has outperformed its IT sector peers over the past year (Source: Bloomberg)
TCS, in a regulatory filing, noted that its board has approved an interim dividend of Rs 9 per share.
The company’s order book at the end of Q1FY24 stood at $10.2 billion, and the book-to-bill ratio stood at 1.4. This is marginally higher as against an order win of $10 billion in the last quarter.
The EBIT margin or operating margin fell to 23.2 percent from 24.49 percent last quarter due to wage hikes announced on April 1.
Also Read | TCS adds 523 employees in Q1FY24 on a net basis, attrition falls to 17.8%
"We remain confident in the longer-term demand for our services, driven by the emergence of newer technologies. We are investing early in building capabilities at scale on these new technologies, and in research and innovation," TCS chief executive officer K Krithivasan said.
"We are proactively building differentiating capabilities in generative AI and actively working on such projects with our clients, delivering impact on technology, operations and client experience dimensions," added N Ganapathy Subramaniam, chief operating officer, TCS.
Among the various industries to which TCS caters to, the business growth was led by life sciences and healthcare at 10.1 percent, the manufacturing vertical grew 9.4 percent, BFSI grew 3 percent, retail and CPG grew
5.3 percent, technology and services grew 4.4 percent while communications and media grew 0.5 percent.
"Among the major markets, the United Kingdom led with 16.1 percent growth; North America grew 4.6 percent and Continental Europe grew 3.4 percent. In emerging markets, Middle East and Africa grew 15.2 percent, India grew 14 percent, Latin America grew 13.5 percent, and Asia Pacific grew 4.7 percent," the release added.
Ahead of the earnings report being declared, the shares of TCS edged lower at the stock market. The scrip settled at Rs 3,260.20 apiece on the BSE, which was 0.36 percent lower as against the previous day's close.
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