TCS Q1 Results: India’s largest IT services company Tata Consultancy Services (TCS) on Friday reported a consolidated net profit of Rs 9,478 crore for the June 2022 quarter, a jump of 5.2 per cent on a year-on-year basis. The company’s revenue during April-June 2022 rose 16.2 per cent to Rs 52,758 crore, compared with Rs 45,411 crore in the year-ago period.
The company’s net profit had stood at Rs 9,031 crore in the corresponding period of the previous financial year.
On a sequential basis, TCS’ net profit witnessed a decline of 4.82 per cent from Rs 9,959 crore in the previous quarter. Its revenue witnessed an increase of 2.29 per cent quarter-on-quarter from Rs 51,572 crore.
TCS’ total expenditure during the June 2022 quarter jumped 19.95 per cent to Rs 40,572 crore, compared with Rs 33,823 crore in the corresponding period last year. Its employee cost also rose 18.23 per cent to Rs 30,327 crore, against Rs 25,649 crore, according to a BSE filing.
The company saw a net headcount addition of 14,136 employees during the June 2022 quarter. The company’s total workforce strength stood at 6,06,331 as on June 31, 2022, according to the filing.
Its attrition rate in information technology (IT) services stood at 19.7 per cent during the June 2022 quarter, higher as compared with 17.4 per cent in the previous quarter, TCS said.
During the quarter, overseas growth at TCS was led by North America which grew 19.1 per cent, followed by the UK (12.6 per cent) and Continental Europe (12.1 per cent). Among emerging markets, Latin America grew 21.6 per cent, India saw a jump of 20.8 per cent, Asia-Pacific was up 6.2 per cent, and Middle East & Africa rises 3.2 per cent, it added.
Segment-wise, TCS growth was led by retail and CPG, which grew 25.1 per cent; followed by communications & media (19.6 per cent), manufacturing vertical (16.4 per cent), technology & services (16.4 per cent), BFSI (13.9 per cent) and life sciences and healthcare (11.9 per cent).
TCS Q1 Results: Dividend Declared
The company also declared its interim dividend. “We would like to inform you that at the board meeting held today (on Friday), the directors have declared an interim dividend of Rs 8 per equity share of Rs 1 each of the company,” it said in a BSE filing. The record date has been fixed as July 16 and the payment date will be August 3.
The company’s earnings per share also increased to Rs 25.9 in the June 2022 quarter, from Rs 24.35 a year ago.
TCS’ shares on Friday fell Rs 22.10, or 0.67 per cent, to close at Rs 3,264.85 apiece on the BSE.
TCS Q1 Results: What Management Says
Rajesh Gopinathan, chief executive officer and managing director of TCS, 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 organisation 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.”
Its Chief Financial Officer Samir Seksaria said it has been a challenging quarter from a cost management perspective. The company’s Q1 operating margin of 23.1 per cent reflects the impact of its annual salary increase, the elevated cost of managing the talent churn and gradually normalising travel expenses.
“However, our longer-term cost structures and relative competitiveness remain unchanged, and position us well to continue on our profitable growth trajectory,” Seksaria added.
During the previous quarter of January-March 2022, TCS had reported a 7.35 per cent year-on-year jump in consolidated net profit to Rs 9,959 crore. Its net profit had stood at Rs 9,246 crore in the year-ago period.
TCS’ revenue had stood at Rs 51,572 crore during the March 2022 quarter, a 15.75 per cent jump as compared with Rs 43,705 crore in the year-ago period. Its total expenditure also rose 18.74 per cent to Rs 37,963 crore, compared with Rs 31,971 crore a year ago. TCS’ consolidated operating income rose 6.79 per cent to Rs 12,383 crore, against Rs 11,596 crore earlier.
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