TCS Q2 net zooms 22.6% to Rs7,901 cr
12 October 2018
Tata Consultancy Services (TCS), India’s top IT services, consulting and business solutions firm, has reported a 22.6 per cent year-on-year increase in its consolidated net profit for the fiscal second quarter ended 30 September 2018 at Rs7,901 crore.
Backed mainly by the rupee depreciation and improved business sentiment, TCS’ second-quarter revenue also rose 20.7 per cent to Rs36,854 crore.
In dollar terms, revenues rose 11.5 per cent to $5,215 million from the year-ago period. This is the first time in eight consecutive quarters that TCS has reported double-digit growth in revenues in constant currency terms.
“This has been a landmark quarter for us,” said MD and CEO Rajesh Gopinathan. “For two years, we have been on a journey to return to double-digit growth. Now that we have the numbers and the momentum, we are confident of continuing on the growth trajectory for the entire financial year.”
“We are very pleased with our all-round strong performance in Q2. 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,” he added.
Large client wins (in retail and banking sectors), especially in the over-$100 million category, helped TCS grow rapidly during the quarter. Overall, It TCS saw client additions across all the key bands: four in the $100 million+ band, seven in $20 million+, 10 in $10 million+ band and 11 got added in the $l million+.
TCS said it is confident that this fiscal will end with a better momentum than in the previous ones.
Digital revenues grew 59.8 per cent YoY. These accounted for 28.1 per cent of the overall revenues in Q2, against 25 per cent in Q1.
“This has been a very good quarter, with strong demand in areas like analytics, cloud and automation. Our Quartz Blockchain Solution is gaining traction, and we are seeing the creation of nascent ecosystems which could transform markets. Our Enterprise Agile 2020 vision is shaping open, collaborative workplaces and Agile ways of working. This, along with MFDM, is driving intelligent automation and the discovery of a new meaning to work, ie, training the machines with the contextual knowledge, scaling businesses and creating ecosystems,” N Ganapathy Subramaniam, chief operating officer and executive director, said.
TCS posted operating margins of 26.5 per cent, up 140 basis points. “The rupee depreciation helped our margins by 130 basis points, while the rest was helped by improving efficiencies within the organisation,” said V Ramakrishnan, CFO.
At a time of sluggish job growth across the industry, 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 4,11,102.
“Our investments in organic talent development and innovative employee engagement initiatives continue to deliver best-in-class HR outcomes,” said Ajoy Mukherjee, Executive Vice-President and Global Head, Human Resources.
“This quarter, we introduced yet another innovation, democratising the entry-level talent acquisition processes in India with the TCS National Qualifier Test."