Tata Consultancy Services on Wednesday announced its consolidated financial results according to Ind AS and IFRS, for the quarter ending September 30, 2023, the company announced through an exchange filing.
Key highlights of the Q2FY24
The company reported revenue of Rs 59,692 crore, marking a substantial 7.9 percent year-over-year (YoY) increase. In constant currency terms, the revenue growth was 2.8 percent YoY.
The operating margin reached 24.3 percent, expanding by 0.3 percent compared to the previous year.
Net income stood at Rs 11,342 crore, reflecting an 8.7 percent YoY growth, with a net margin of 19 percent. The company generated net cash from operations totaling Rs 11,823 crore, which is equivalent to 104.2 percent of the net income.
Touting a diverse and inclusive workplace, the company reported that women constituted 35.8 percent of the workforce, and it employed individuals from 152 different nationalities.
An emphasis on investing in the workforce was evident through the allocation of 26.4 million learning hours and the development of 2.6 million competencies year-to-date. The last twelve months' attrition rate for IT services was reported at 14.9 percent.
Shareholders were informed of a dividend per share amounting to Rs 9.00, with a record date set for October 19, 2023, and the payment date scheduled for November 7, 2023.
K Krithivasan, Chief Executive Officer and Managing Director, said: “Our clients continue to entrust us with critical new technology initiatives, and large programs to digitally transform their IT and business operating models. Strong deal momentum delivered us a very large order book in Q2 – our second highest TCV ever in a quarter, and good pipeline. The resilience of demand for our services, our clients’ willingness to commit to long tenure programs and their continued appetite for experimentation with Gen AI and other new technologies give us confidence in our longer-term growth prospects."
Samir Seksaria, Chief Financial Officer, said: “Our focus on improving employee utilization, while driving productivity improvement and cost efficiency across the organization, has helped us expand our operating margin to 24.3 percent. We will continue to push the growth, efficiency and innovation levers to further improve our profitability. In keeping with our shareholder friendly capital allocation policy, the Board has recommended a share buyback to the tune of `17,000 crore at `4,150 per share.”
Q2 Segment Highlights
Industries: Growth was led by the Energy, Resources and Utilities1 vertical which grew 14.8 percent, Manufacturing which grew 5.8 percent and Life Sciences and Healthcare which grew 5 percent. The Consumer Business Group (CBG)2 grew 1 percent, BFSI grew -0.5 percent, Communications & Media grew -2.1 percent and Technology & Services grew -2.2 percent.
Markets: Among major markets, the United Kingdom led with 10.7 percent growth; North America grew 0.1 percent and Continental Europe grew 1.3 percent. In emerging markets, Middle East & Africa grew 15.9 percent, Latin America grew 13.1 percent, Asia Pacific grew 4.1 percent and India grew 3.9 percent.
Services: Clients continue to prioritize business agility and cost optimization initiatives even while exploring innovative uses of Gen AI. Clients also focused on operating model transformation, vendor consolidation and Enterprise IT as a Service. Among service lines, AI.Cloud, TCS Interactive and IoT and Digital Engineering led growth. TCS has over 250 Gen AI opportunities in the pipeline, driven by a rich catalog of use cases across industries, early adoption partnerships with hyperscalers and a 100,000-strong GenAI-ready workforce.
Tata Consultancy Services shares
The shares of TCS on Wednesday at 3:30 pm IST closed at Rs 3,613, down by 0.44 percent.