TCS Q2 net falls 2.1% YoY on softness in banking, retail

TCS said growth was led by Europe (up 5.3 per cent Q-o-Q), Latin America (up 5.7 per cent Q-o-Q), APAC (up 3 per cent Q-o-Q) and UK (up 2.5 per cent Q-o-Q). North America grew by 1.4 per cent Q-o-Q with continued softness in banking and retail.

By: ENS Economic Bureau | Mumbai | Published: October 13, 2017 2:02 am

tcs, tata consultancy services, tcs results, tcs q2 results, tcs earnings, TCS shares, tata consultancy services quarterly results, tcs quarterly results, tcs dividends, tcs q2 profits, q2 share prices, business news, indian expressTata Consultancy Services (TCS), India’s largest IT company, has posted a 2.1 per cent decline in net profit at Rs 6,446 crore for the second quarter ended September 2017 as against Rs 6,586 crore in the same period of last year. However, the company reported an increase of 8.4 per cent in net profit on a sequential basis from the June 2017 quarter, riding on robust volume growth and good demand across various verticals.

Revenue for the September 2017 quarter rose 4.3 per cent to Rs 30,541 crore as against Rs 29,284 crore in the same period of last year. On a sequential basis, revenue rose by 3.2 per cent from the June quarter.

TCS shares rose by 1.92 per cent to Rs 2548.55 on the BSE on Thursday.

On the second quarter performance, Rajesh Gopinathan, CEO and MD, said: “We experienced robust volume growth in Q2, driven by good demand across multiple industry verticals. Strong, broadbased client metrics this quarter demonstrates our increasing success with newer customers. Large deal wins this quarter, a good pipeline, and bottoming out of the Retail sector softness positions us well.”

“We continue to gain share in the fast growing Digital spend of our customers, evident in our industry-leading Digital growth in Q2. By sharpening our focus on individual components of the Digital service stack, we have been able to bring to bear the full power of our contextual knowledge, research and innovation, and investments in location-independent agile, automation and cloud on our customers’ transformational imperatives and become a trusted partner in their Business 4.0 journeys,” Gopinathan said. TCS also declared a dividend of Rs 7 per share.

According to TCS, strong revenue growth was visible across verticals in the September quarter. With the exception of retail and CMI, all industry verticals grew above the company average, led by travel & hospitality (up 8 per cent quarter on quarter), energy & utilities (up 7.2 per cent Q-o-Q) and life sciences & healthcare (up 3.6 per cent Q-o-Q). On a year on year basis, all industry verticals – with the exception of BFSI (banking and financial services) and retail – grew above 9.5 per cent.

N. Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: “it has been a very satisfying performance this quarter, striking a good balance between pursuing revenue growth, particularly in Digital opportunities, while tightening our execution to deliver greater efficiency. Our client-centricity and business depth are resulting in industry-leading customer satisfaction levels and strong client metrics. With the sectoral headwinds slowly abating, we expect steadier and stronger growth ahead.”

TCS said growth was led by Europe (up 5.3 per cent Q-o-Q), Latin America (up 5.7 per cent Q-o-Q), APAC (up 3 per cent Q-o-Q) and UK (up 2.5 per cent Q-o-Q). North America grew by 1.4 per cent Q-o-Q with continued softness in banking and retail.

V. Ramakrishnan, Chief Financial Officer, said: “rigour and discipline in our operations helped accomplish an impressive margin performance and progress along the profitability path we had outlined earlier. Our investment program remains geared for growth. Continued investments in digital design and transformational capabilities are paying off, and it shows in the strong growth in our digital business.”

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