Tata Consultancy Services (TCS), the country’s largest software services exporter, kicked off the earnings season for the first quarter ended June 30. The board meeting has declared an interim dividend of Rs 8 per equity share of Rs 1 each of the company. The record date has been fixed as July 16 and the payment date will be August 3. The company’s earnings per share increased to Rs 25.9 in the June 2022 quarter, from Rs 24.35 a year ago.
The company reported a 4.5% decline in net profit to Rs 9,478 on a quarter-on-quarter basis for the three months of April-June 2022, however consolidated net profit for the June 2022 quarter is a jump of 5.2 per cent on a year-on-year basis. The company’s revenue during April-June 2022 rose 16.2 per cent to Rs 52,758 crore, compared with Rs 45,411 crore in the year-ago period. The company’s net profit had stood at Rs 9,031 crore in the corresponding period of the previous financial year.
On a sequential basis, TCS’ net profit witnessed a decline of 4.82 per cent from Rs 9,959 crore in the previous quarter. Its revenue witnessed an increase of 2.29 per cent quarter-on-quarter from Rs 51,572 crore.
However, the impact of salary hikes, subcontracting usage and supply side challenges were felt on the operating margins, which declined 186 basis points sequentially to 23.1%, leading to an operating income of Rs 12,186 crore, down 3.5% q-o-q.
TCS added 14,136 employees to its rolls on a net basis. The total headcount stood at 606,331. However, the attrition rose by 230 basis points to 19.7% during the quarter.
TCS’ total expenditure during the June 2022 quarter jumped 19.95 per cent to Rs 40,572 crore, compared with Rs 33,823 crore in the corresponding period last year. Its employee cost also rose 18.23 per cent to Rs 30,327 crore, against Rs 25,649 crore, according to a BSE filing. Segment-wise, TCS growth was led by retail and CPG, which grew 25.1 per cent; followed by communications & media (19.6 per cent), manufacturing vertical (16.4 per cent), technology & services (16.4 per cent)
Rajesh Gopinathan, chief executive officer and managing director of TCS, said, “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. 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.”
A Recap
During the previous quarter of January-March 2022, TCS had reported a 7.35 per cent year-on-year jump in consolidated net profit to Rs 9,959 crore. Its net profit had stood at Rs 9,246 crore in the year-ago period. TCS’ revenue had stood at Rs 51,572 crore during the March 2022 quarter, a 15.75 per cent jump as compared with Rs 43,705 crore in the year-ago period. Its total expenditure also rose 18.74 per cent to Rs 37,963 crore, compared with Rs 31,971 crore a year ago. TCS’ consolidated operating income rose 6.79 per cent to Rs 12,383 crore, against Rs 11,596 crore earlier.
