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earnings | IST

TCS Q2 net profit grows 1.8% YoY to Rs 8,042 crore, misses estimates

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Tata Consultancy Services Ltd (TCS) on Thursday reported a 1.8 percent year-on-year (YoY) jump in net profit at Rs 8,042 crore for the second quarter ended September 2019.

IT major Tata Consultancy Services Ltd (TCS) on Thursday reported a 1.8 percent year-on-year (YoY) jump in net profit at Rs 8,042 crore for the second quarter ended September 2019.
CNBC-TV18 poll had predicted a profit of Rs 8,322 crore for the quarter under review.
In the corresponding quarter last year, the company posted a net profit of Rs 7,901 crore.
Revenue of the IT firm grew 5.8 percent to Rs 38,977 crore in the July-September quarter compared with Rs 36,854 crore in the same quarter of the previous fiscal, it added.
The Mumbai-headquartered company also declared a second interim dividend of Rs 5 and a special dividend of Rs 40 per equity share of Rs 1 each of the company.
Company's earnings before interest and tax (EBIT) for the second quarter is at Rs 9,361 crore with EBIT margin at 24 percent.
TCS's consolidated headcount stood at 450,738 as of September 30, 2019. In Q2, 14,097 employees were added, the highest ever number of employees to be on-boarded in a quarter.
  • Revenue at Rs 38,977 crore, +5.8% YoY.
  • Constant currency revenue growth: +8.4% YoY.
  • Net income at Rs 8,042 crore, +1.8% YoY.
  • Operating margin at 24%; Net Margin at 20.6%.
  • Earnings per share at Rs 21.43, +3.8% YoY.
  • Net cash from operations at Rs 8,686 crore i.e. 108% of net income.
  • Rajesh Gopinathan, chief executive officer and managing director, said, "We ended the quarter with steady growth despite increased volatility in the financial services and retail verticals. We remain confident as the medium and longer-term demand for our services continues to be very strong, as evidenced by our Q2 order book - the highest in the last six quarters."
    N Ganapathy Subramaniam, chief operating officer and executive director, said, "We continue to make significant investments in differentiating digital capabilities that are helping us participate in key growth areas of our client's technology spend - be it their cloud transformation, data maturity or in advancing their automation agenda. Our products and platforms are seeing increased client adoption and market coverage. During the quarter, we launched a unified TCS BaNCS Asset Servicing platform for asset managers, broker-dealers and custodians and a comprehensive Site Feasibility Assessment platform within our Advanced Drug Development platform suite."
    V Ramakrishnan, chief financial officer, said, "We have been gearing up for growth despite the volatility. Our margins in Q2 reflect our continued investments in our people, and in building the capacity we need to fulfil our strong order book."
    Moshe Katri, managing director of Wedbush Securities, said, "Management has been pretty clear that they have kind of transmitted and told the street that our financial services were going to be a bit weaker. The surprise was really more on the margin side of the business, which is a bit unusual.”
    Shares of TCS ended at Rs 2,004.40, down Rs 16.25, or 0.80 percent on the BSE.