TCS net profit up 17 per cent, beats estimates
Net profit at Rs 11,074 crore as against analysts’ prediction of about Rs 10,890 crore; sequentially profit down 2.8%.
BENGALURU: The country’s largest IT services company Tata Consultancy Services (TCS) on Wednesday reported a 16.8% increase in consolidated net profit at `11,074 crore for the quarter ended June 30, 2023.
The net profit beats Street estimates as analysts had predicted it to be about `10,890 crore. However, sequentially the net profit was down 2.8%. The company’s net profit stood at `11,392 crore in the quarter ended March 2023. Its revenue for the first quarter stood at `59,381 crore, a 12.6% increase as compared to `52,758 crore in the same quarter last year. K Krithivasan, CEO and MD, TCS said, “Technology spending in the long-term is likely to be strong and that is validated by the TCV (total contract value) we have in multiple verticals and geographies. Our pipeline remains strong and our clients continue to invest in technology, but there is near-term softness because of uncertainty.”
TCS’s operating margin for the June quarter stood at 23.2%, an expansion of 10 basis points y-o-y. The company’s order book stood at $10.2 billion. The company clarified that the TCV does not include the BSNL opportunity. TCS also said it is proactively building differentiating capabilities in generative AI and actively working on projects with its clients, delivering impact on technology, operations and client experience dimensions. Samir Seksaria, chief financial officer, said 26-28% remains their aspirational margin band, and that they will claw back on margins.
Among major markets, the UK led with 16.1% growth, North America grew 4.6% and Continental Europe grew 3.4%. The company’s growth was led by life sciences and healthcare, which grew 10.1%, the manufacturing vertical grew 9.4% and BFSI grew 3%. The company has announced Rs 9 dividend per share. N Ganapathy Subramaniam, COO and ED, said: “Our products and platforms achieved major milestones during the quarter with several transformational engagements going live. In the UK Life and Pensions administration space, we signed three new deals on our digital insurance platform.”
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