TCS saw an increase in profits due to the impact of major deals signed in the previous fiscal year, resulting in all markets and verticals showing positive performance on a sequential basis.
Tata Consultancy Services (TCS) started the first quarter earnings season with a 8.7 per cent rise in net profit of ₹12,040 crore, surpassing the cautious predictions made by several brokerages.
Last year during the same quarter, the software giant made a net profit of ₹11,074 crore.
Analysts had predicted that the Tata group’s main company would report a net profit of around ₹11,900-12,000 crore.
TCS saw an increase in profits due to the impact of large deals from the previous fiscal year, with every market and sector showing positive performance one after the other.
Brokerage firms, like Motilal Oswal, had predicted a revenue of ₹62,200 crore, but the actual revenue in rupees surpassed their estimates.
TCS’s revenues increased by 5.44 percent to ₹62,613 crore from ₹59,381 crore in the previous year. Revenues totaled $7.5 billion in dollars, up nearly 4 percent from $7.2 billion last year.
In a consecutive manner, revenue increased by 1.92 percent, surpassing analyst estimates of approximately $7.4 billion.
K. Krithivasan, the CEO and MD of TCS, stated that it is premature to definitively declare if the sector has reached the growth trajectory.
He repeated the position stated in the previous quarter that 2024-25 will surpass 2023-24. “The market conditions have not changed from the previous quarter.”
Book orders decreased compared to the previous quarter and year: the total contract amount was $8.3 billion, down from $13.2 billion in the last three months and $10.2 billion a year ago.
In accordance with predictions by analysts, TCS experienced a decrease in operating margins due to salary increases.
It was at 24.7 per cent compared to 26 per cent in the January-March timeframe.
North America declined by 1.1 per cent in the last fiscal year, while Europe increased by 6 per cent and Continental Europe by 0.9 per cent.
Emerging markets experienced a significant increase in double-digit growth, with India leading the way with a nearly 62 per cent rise.
In the verticals, banking and financial services experienced a 0.9 per cent decrease, consumer business saw a 0.3 per cent decline, manufacturing had a significant growth of 9.4 per cent, while energy, resources & utilities grew by 5.7 per cent, and life sciences & healthcare increased by 4 per cent.
The number of employees at the end of the quarter reached 6.06 lakh compared to 6.01 lakh in the previous three months. The attrition rate decreased slightly to 12.1 per cent from 12.5 per cent in January-March.
During Thursday’s board meeting, the directors proposed a ₹10 interim dividend per share.
Before the outcomes were announced, TCS’s stock closed at ₹3,922.70 on the BSE, showing an increase of 0.33 per cent.
