TCS Q2 results: Tata Consultancy Services sees 9% YOY rise in profit, beats estimates

TCS Q2 results today: Tata Consultancy Services (TCS), India’s largest IT firm, announced a 9% year-on-year (YoY) increase in consolidated net profit for the quarter ending September 2023, reaching Rs 11,342 crore. Consolidated revenue showed nearly 8% YoY growth, reaching Rs 59,692 crore, according to an ET report. In terms of sequential growth, revenue had a modest 0.5% uptick, and profit rose by 2.4%.
According to an ETNow poll, net profit and revenue were expected to reach Rs 11,095 crore and Rs 60,160 crore, respectively.
TCS’ board recommended a second interim dividend of Rs 9 per share and approved a share buyback program totaling Rs 17,000 crore at Rs 4,150 per share. Before the earnings report, TCS shares closed down 0.5% at Rs 3,609.90 on the National Stock Exchange.
In constant currency figures, revenue increased by 2.8% YoY. In terms of specific segments, the banking financial services, and insurance (BFSI) sector observed less than 1% sequential growth in revenue, reaching Rs 22,840 crore.
The operating margin, calculated as earnings before interest and taxes (EBIT), saw a sequential improvement of 110 basis points, reaching 24.3%, and a year-on-year increase of 30 basis points.
TCS reported an order book of $11.2 billion, with a book-to-bill ratio of 1.6.
K Krithivasan, Chief Executive Officer and Managing Director, highlighted the strong deal momentum, leading to a substantial order book in Q2, stating, “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.”
CFO Samir Seksaria attributed the significant improvement in profitability to enhanced utilization and cost efficiencies and expressed the intention to further enhance profitability through growth, efficiency, and innovation.
TCS observed a decrease in attrition levels in the September quarter, with a 12-month trailing attrition rate of 14.9% compared to 17.8% in the previous quarter. The total workforce as of September 30 was 608,985, reflecting TCS’s emphasis on improving workforce utilization and productivity.

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