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tcs q2 results: TCS Q2 Results: Profit rises 9% YoY to Rs 11,342 crore, beats estimates

MUMBAI – Tata Consultancy Services (TCS) on Wednesday reported a 9% year-on-year (YoY) growth in consolidated net profit for the quarter ended September 2023 to Rs 11,342 crore. Consolidated revenue grew nearly 8% YoY to Rs 59,692 crore.

Sequentially, the growth was muted, with revenue rising a mere 0.5% and profit up 2.4%.

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An ETNow poll saw the net profit and revenue at Rs 11,095 crore and Rs 60,160 crore, respectively.

The board has recommended a second interim dividend of Rs 9 per share. The board has also approved buyback of shares worth Rs 17,000 crore at Rs 4,150 apiece.

Ahead of the earnings, shares of TCS ended 0.5% down at Rs 3,609.90 on the National Stock Exchange.

In constant currency terms, revenue grew 2.8% YoY. Segment-wise, the mainstay banking financial services, and insurance (BFSI) vertical saw less than a percent growth in revenue sequentially in the quarter to Rs 22,840 crore.

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Operating margin, calculated as earnings, before interest and taxes (EBIT), improved 110 basis points sequentially to 24.3% and was up 30 bps YoY.The software major’s order book was $11.2 billion, with a book-to-bill ratio of 1.6.

“Strong deal momentum delivered us a very large order book in Q2 – our second-highest TCV ever in a quarter and a good pipeline,” said K Krithivasan, Chief Executive Officer and Managing Director.

“The resilience of demand for our services, our clients’ willingness to commit to long tenure programs, and their continued appetite for experimentation with Gen AI and other new technologies give us confidence in our longer-term growth prospects,” the CEO said.

The strong improvement in profitability was on the back of better utilisation and cost efficiencies, said CFO Samir Seksaria.

“We will continue to push the growth, efficiency, and innovation levers to further improve our profitability,” he added.

TCS saw attrition levels coming further down in the September quarter. The attrition rate on a 12-month trailing basis was 14.9% compared to 17.8% a quarter ago. With gross additions held below departures, TCS’ total workforce stood at 608,985 as of September 30, which reflects the company’s focus on improving workforce utilization and productivity.

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