Riding high on the bounceback in the North American revenues, Tata Consultancy Services (TCS), India’s largest software exporter, on Tuesday beat market estimates and posted a 23.5 per cent rise in consolidated net profit to Rs 7,340 crore for the first quarter ended June 2018 as against a net profit of Rs 5,945 crore in the same period previous fiscal. The net profit increased by 6.3 per cent on a quarter-on-quarter basis.
The Tata group company — which accounts for a lion’s share of the group’s overall profit — reported a 15.8 per cent rise in its income from operations to Rs 34,261 crore for the first quarter as against Rs 29,584 crore a year earlier. “We are starting the new fiscal year on a strong note, with the growth engine firing on all cylinders. Our banking vertical recovered very nicely this quarter, while other industry verticals maintained their momentum,” TCS CEO and MD Rajesh Gopinathan said in a statement.
“With a good set of wins during the quarter, a robust deal pipeline and accelerating digital demand, we are positioned well for the future,” Gopinathan said. Among its markets, North America — which contributes more than half to its revenue — bounced back growing 7 per cent, UK 18.7 per cent, Europe 18.6 per cent and Asia Pacific 10.8 per cent. “Customers across verticals and markets are embracing our Business 4.0 thought-leadership framework and accelerating their digital transformation journeys. Our contextual knowledge, full spectrum capabilities and investments in research and innovation are making us their preferred partner for their growth and transformation initiatives,” he said.
TCS shares closed 0.56 per cent lower at Rs 1,877 on the BSE on Tuesday. The results came in after market hours.
The company also declared an interim dividend of Rs 4 per equity share (of Re 1 each). It had recently announced a Rs 16,000-crore buyback offer entailing up to 7.61 crore shares or 1.99 per cent of the total paid-up equity share capital at Rs 2,100 a share.
N Ganapathy Subramaniam, chief operating officer & executive director, said: “It has been an excellent quarter, with broad-based growth across all segments and good client additions. We are seeing strong demand in areas like cloud transformation, cyber-security and data privacy, and automation. Our investments in forward-thinking doctrines like the machine first delivery model (MFDM) and location-independent agile are giving customers immediate, measurable business benefits and speed to market.”