TCS net profit rises 5.21% in first quarter

Mumbai: Tata Consultancy Services (TCS), the country’s largest IT firm, on Friday reported a net profit of Rs 9,478 crore for the first quarter of the current financial year as compared to Rs 9,008 crore reported in the corresponding period of the last year, posting year-on-year growth of 5.21 per cent. The company’s revenue jumped by 16.2 per cent year-on-year to Rs 52,758 crore for the quarter ended June 30.

“We are starting the new fiscal year on a strong note, with all-round growth and strong deal wins across all our segments. Pipeline velocity and deal closures continue to be strong, but we remain vigilant given the macro-level uncertainties,” Rajesh Gopinathan, Chief Executive Officer and Managing Director, Tata Consultancy Services, said in a statement.

“Our new organisation structure has settled in nicely, getting us closer to our clients and making us nimbler in a dynamic environment. Looking ahead, we remain confident in the resilience of technology spending and the secular tailwinds driving our growth,” Gopinathan said.

TCS said its constant currency revenue growth during the quarter under review stood at 15.5 per cent year-on-year.
The company’s operating margin contracted by 2.4 percentage point to 23.1 per cent.

“It has been a challenging quarter from a cost management perspective. Our Q1 operating margin of 23.1 per cent reflects the impact of our annual salary increase, the elevated cost of managing the talent churn and gradually normalising travel expenses. However, our longer-term cost structures and relative competitiveness remain unchanged, and position us well to continue on our profitable growth trajectory,” said Samir Seksaria, Chief Financial Officer, TCS.

TCS announced a dividend of Rs 8 per share, which will be credited by August 3, 2022. The record date for the same is July 16, 2022.

N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, said: “We are pleased with our execution during the quarter wherein we successfully delivered several transformation programs. The investments we made on people, upskilling efforts and select lateral hiring et al helped manage the talent turnover with minimum impact on our operations.”

“During the quarter, we have resumed in-person meetings and hosted several clients at our facilities. We are bringing in more of our associates back to our development centres, and it is steadily increasing at all levels. On the sustainability front, we have signed our commitment to SBTi version 5 standards during the quarter and are making steady progress towards our net zero journey with tremendous alignment to this initiative across our associates,” said Subramaniam.