India's largest IT services firm Tata Consultancy Services (TCS) on Thursday posted a 23 per cent YoY rise in its net profit at Rs 79.01 billion for the September quarter of FY19. Revenue in rupee terms grew 20.7 per cent YoY at Rs 368.54 billion, while in constant currency terms, it grew at 11.5 per cent YoY. The company, in its press release, stated that digital demand drove double-digit growth in the second quarter.
The management said that Q2 was a landmark quarter for the company in many ways and that they had the numbers to ensure double-digit revenue growth in constant currency terms continued. It said that rupee depreciation boosted the business significantly.
Rajesh Gopinathan, CEO and MD, said, "We are very pleased with our all-around 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."
Earnings per share (EPS) of the company came in at Rs 20.66, up 22.7 per cent YoY. The company also announced the second interim dividend of Rs 4 per equity share of Re 1 each, which will be paid to the equity shareholders on October 30, 2018.
Here's a look at the key highlights of the IT bellwether's Q2 results:-
Financials and business highlights
Revenue for the quarter came in at Rs 368.54 billion, up 20.7 per cent YoY, while operating margin stood at 26.5 per cent, up 1.4 per cent YoY. Net cash from operations was at Rs 73.63 billion, which was 93.2 per cent of net income. Growth was led by UK (+22.8%), Europe (+17.4%), and Asia Pacific (+12.5%).
Revenue growth in North America accelerated further to 8.1%, versus 7% growth in Q1. India grew 7.4%. BFSI and Retail verticals rose 6.1 per cent and 15.6 per cent YoY. The company added 4 new clients In the $100M+ band, 7 in the $20M+ band, 10 in the $10M+ band, 11 In the $lM+ band.
Digital Transformation Services
The company noted that its Business 4.0 thought leadership framework to guide and shape the re-imagination of businesses for growth and transformation continues to resonate strongly with customers. Cloud Services, Analytlcs, loT, TCS Interactive, Cyber Security and Enterprise Intelligent Automation, all experienced strong growth during the quarter. Newer service lines - Blockchain, Digital Workplace and Quality Engineering & Transformation - are seeing strong pipeline build-up.
TCS' Business & Technology Services saw strong and broad-based revenue growth across service practices. Investments in new services and offerings, assets, thought leadership and Innovation have started showing results in terms of deal wins and pipeline build-up, as well as through client and analyst endorsements and thought leadership publications.
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 411,102 on a consolidated basis. The percentage of women in the workforce rose further to 35.7 per cent, while the total number of nationalities represented grew to 147. IT Services attrition rate (last twelve months) stayed unchanged sequentially at 10.9%.
The company has joined hands with a number of foreign companies in diverse fields. It said it has been selected by a leading UK retail chain to improve the in-store experience with next gen Interactive technologies leveraging virtual personal assistants.
That apart, it has been chosen by a top US agricultural firm for a multi-year transformation and managed services engagement using Ignlo and Mastercraft platforms for application, infrastructure and security services.
Also, it has been selected by a global banking firm in Germany to design an operating model for quality assurance of its cryptography engineering solutions, and enable the customer to leverage its partnership ecosystem for Identifying new revenue channels. TCS will define and set up a centralized quality engineering services division and also provide the roadmap to roll out existing business frameworks to other geographies.