TCS Q2 net up 6% at Rs 2,301 cr

Tata Consultancy Services (TCS), India’s largest software exporter, on Monday reported a 6.1 per cent rise in its second-quarter net profit from a year ago, on the back of favourable growth in international markets, strong growth in volumes and business wins across key verticals.

According to the Indian accounting standard, it posted a consolidated net profit of Rs 2,301 crore for July-September. Revenues rose 25.3 per cent to Rs 11,633.49 crore.

TCS witnessed 10 per cent growth in the US, while its businesses in North America, its largest market, and Continental Europe grew by over nine per cent each.

Operating margin improved by 94 basis points (bps) to 27.1 per cent, while volume growth stood at 6.25 per cent, compared to 7.4 per cent growth in the immediate previous quarter.

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Rs 11,633.49 crore revenues, up 25.3 per cent from Rs 9,286.39 crore

Rs 2,169.21 crore 
net profit during the July-September last year
* The board of directors proposed an interim dividend of Rs 3 per share to shareholders
* The company made a net addition of 12,580 employees, taking its total headcount to 2,14,770

Infosys, India’s second-largest information technology (IT) services company, had earlier reported an operating margin of 28.2 per cent, an improvement of 209 bps over the immediate previous quarter, and volume growth of 4.5 per cent.

TCS CFO S Mahalingam said given the breadth of the company’s global operations across 45 countries, the recent unprecedented volatility in the foreign currency markets was a cause of great concern.

“We continue to make the necessary investments to support our future business growth in different markets as we remain in the expansion mode. However, we are also working to optimise our cost structure and keeping a close watch on economic signals,” he added.

TCS echoed the industry’s concerns about macroeconomic uncertainties, but said the demand outlook was looking healthy. It said it was chasing at least 10 large deals in telecom, high-tech, life science, retail, manufacturing, and banking, financial services and insurance sectors.

“The macroeconomic environment is worrisome, but we have delivered numbers which are extremely sound. We are getting positive vibes from the customers in terms of their IT spend going forward,” said TCS CEO and MD N Chandrasekaran.