TCS Q2 net up 14.5% at Rs6,055 cr; trails Infosys in revenue growth

Tata Consultancy Services, India's largest IT services company, has reported a net profit of Rs6,055 crore on sales of Rs27,165 crore in the July-September 2015-16 quarter. However, TCS disappointed with 3.9 per cent sequential rise in constant currency revenue growth, far short of the high growth rate set by rival Infosys.

In dollar terms, TCS' net profit rose 3.2 per cent sequentially to $926 million.

Net profit on an year-on-year basis, however, was up 14.5 per cent from Rs5,288 crore reported in Q2 2014-15. 

For the quarter ended 30 September 2015, TCS' revenue grew 5.8 per cent to Rs27,165.5 crore (3 per cent to $4.16 billion in dollar terms).

On Monday, Infosys had surprised market with 6.9 per cent sequential rise in constant currency revenue. This is the second straight quarter when Infosys trumped TCS in revenue growth, the key matrix tracked by investors.

However, TCS operating or EBIT margin of 27.1 per cent was 160 basis points higher than what Infosys posted in the September quarter.

TCS added a total of 25,168 employees in the September quarter, taking its total headcount to 3,35,620 as of September 30. Utilisation for September quarter was 86 per cent, excluding trainees, TCS said. Employee attrition (last 12 months) was 16.2 per cent including BPS (business process services).

The Mumbai-based IT major added three customers in the $100 million plus list, while the number of $10 million plus customers went up by six.

The board of directors of TCS announced a second interim dividend of Rs5.50 per Re1 share and fixed 26 October 2015 as the record date for the purpose of payment of second interim dividend, which will be paid out on 30 October 2015.

Shares of the company closed 0.2 per cent higher at Rs2,597.40 on the Bombay Stock exchange (BSE).

TCS' results reflect concerns raised by Infosys, which lowered its dollar revenue guidance for the year, despite stellar performance in the second quarter.

Technology researcher Gartner had in June given a gloomy outlook for worldwide technology spending and said it expected global tech spending to drop 5.5 per cent in 2015.

Industry body Nasscom has also raised concerns about slower growth in the sector and pegged software export revenues to grow 12-14 per cent in FY16, down from 13-15 per cent in FY15.