Moneycontrol
Last Updated : Oct 11, 2018 05:55 PM IST | Source: Moneycontrol.com

TCS reports net profit of Rs 7,901 crore; 10 key takeaways from Q2 results

The numbers were posted post market hours. The stock closed 3.1 percent lower on Thursday ahead of results.

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Tata Consultancy Services (TCS) reported results for the quarter ended September 30 which was slightly below CNBC-TV18 estimates but managed to outperform on EBIT as well as revenue parameters.

The numbers were posted post market hours. The stock closed 3.1 percent lower on Thursday ahead of results.

Here is a list of top 10 takeaways from TCS Q2 results:

Net Profit:

TCS reported a net profit of Rs 7,901 crore for the quarter ended September which was slightly lower than the CNBC-TV18 estimate of Rs 8,065 crore. The IT major reported a net profit of Rs 6,446 in the corresponding quarter of last fiscal. On a sequential basis, the net profit rose by 7.6 percent.

Revenue:

TCS revenue rose 20.7 percent on a YoY basis to Rs 36,854 crore for the quarter ended September, and on a quarter-on-quarter basis, it rose by 7.57 percent. In constant currency terms, revenues rose by 11.5 percent on a YoY basis.

"Revenue growth was driven by expanding demand for digital transformation across verticals and continued acceleration In BFSI and Retail. Our industry-leading digital growth and best-in-class client metrics bear testimony to our standing as the preferred partner in our customers' growth and transformation Initiatives," Rajesh Gopinathan, CEO and MD, said in a release to exchanges.

Revenue in Dollar terms:

In dollar terms, the company reported 3.2 percent sequential growth in topline to $5,215 million while revenue growth in constant currency terms was 3.7 percent QoQ, which was largely in line with expectations.

Operational Numbers:

On the operational front, earnings before interest and tax (EBIT) grew by 13.9 percent to Rs 9,771 crore with margin expansion of 147 basis points on a sequential basis.

Dividend:

The Board of Directors has declared a second interim dividend of Rs. 4 per equity share of Re. 1 each. October 24, 2018, is the record date fixed for the purpose.

Performance of business verticals:

The Tata Group firm said revenue growth accelerated in BFSI to 6.1 percent during the quarter against 4.1 percent in Q1, and Retail & CPG to 15.6 percent against 12.8 percent in the previous quarter.

Apart from BFSI, other verticals to show strong growth were: Energy & Utilities saw a growth of 22.2 percent, and Life Sciences & Healthcare saw a growth of 14.7 percent.

Growth in geographical markets:

Growth was led by UK (+22.8%), Europe (+17.4%), and Asia Pacific (+12.5%). Revenue growth in North America was accelerated further to 8.1 percent, compared to 7 percent seen in Q1. India grew by 7.4 percent.

Employees Additions/Attrition:

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 411,102 on a consolidated basis. The percentage of women in the workforce rose further to 35.7 percent, while the total number of nationalities represented grew to 147.

"Our investments in organic talent development and innovative employee engagement initiatives continue to deliver best-in-class HR outcomes. This quarter, we introduced yet another innovation, democratizing the entry-level talent acquisition processes in India with the TCS National Qualifier Test," Ajoy Mukherjee, Executive Vice President, and Global Head, Human Resources.

"To all the talented youth out there, I want to say this: Regardless of where you are from if you have the talent and the drive, we have a career for you," he said.

Client Additions:

TCS saw superior client additions across bands: 4 new clients were added in the $100 million+ band, 7 more were added in the $20 million+ band, 10 in the $10 million+ band and 11 got added in the $l million+ band.

TCS continued to have the best retention rate in the industry, with IT Services attrition rate (LTM) staying unchanged sequentially at 10.9 percent.

Patents:

As of September 2018, the company has applied for 4,185 patents, including 207 applied during the quarter and has been granted 782 patents.
First Published on Oct 11, 2018 05:54 pm
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