TCS Q1 results: Net profit rises 28.5% to Rs 9,008 cr, misses estimates

Software services heavyweight Tata Consultancy Services on Thursday reported 28.5% rise in consolidated net profit for June quarter at Rs 9,008 crore, powered by higher demand from businesses ramping up digital services during the Covid crisis. It was Rs 7,008 crore in the year-ago period. However, the company fell short of the estimates.

Analysts had estimated up to 36% YoY rise in net profit.

Consolidated revenue rose 18% to Rs 45,411 crore from Rs 38,322 crore in June 2020. 

The company also announced interim dividend of Rs 7 per share. The company's workforce crossed the 500,000-mark at 509,058 with the highest-ever quarterly net addition of 20,409 people.

TCS Chief Executive Officer and Managing Director Rajesh Gopinathan said the firm's employees have demonstrated phenomenal character in helping each other, being meaningful to the communities and delivering on commitments to clients.

"On that backdrop, our business in North America, BFSI and Retail all showed an appreciable growth which underlines the resilience of our operating model, relevance of our offerings and above all, the passion and dedication of our associates," he said in a statement.

He added that given the variants of the virus and fears of a potential third wave, the company is watchful of the emerging situation and remains optimistic of the opportunities in core markets and verticals.

"We crossed the USD 6 billion milestone in quarterly revenue this quarter. In addition to our annual salary increase and promotions, we undertook one of the largest vaccination drives in the private sector.

"Despite this and headwinds in regional markets, we expanded our Q1 operating margin year on year, reflecting the inherent resilience of our business model," TCS Chief Financial Officer Samir Seksaria said.

N Ganapathy Subramaniam, COO, TCS, said: “We overcame the challenges posed by the second wave of Covid-19 in India taking some practical approaches and am satisfied that the delivery of all our client engagements was kept on track. We once again had a superior quarter with a TCV of $8.1 billion which is broad based across markets and verticals. Our G+T themes are seeing traction in the market place and we are delighted to sign our largest SaaS deal ever for the TCS BaNCS Global Banking Platform on the cloud during the quarter.”

Ahead of earnings announcement, shares of TCS closed trade at Rs 3,253, down Rs 21.95, or 0.67 per cent on the NSE on Thursday.