TCS net up, revenue flat sequentially in second quarter

Mumbai, Oct 13 (IANS) Global software major Tata Consultancy Services (TCS) on Thursday reported Rs 6,586 crore net profit for the second quarter (July-September), registering 8.8 per cent year-on-year (YoY) growth over the like period year ago from Rs 6,055 crore.

Sequentially, net profit grew 4.3 per cent from Rs 6,317 crore in the first quarter (April-June) of fiscal 2016-17 in rupee terms.

In a regulatory filing to the stock exchanges, the Indian IT bellwether said revenue for the quarter under review (second quarter) increased to Rs 29,284 crore from Rs 27,166 crore in same period year ago, posting 7.8 per cent YoY growth but was flat (0.1 per cent) sequentially from Rs 29,305 crore in first quarter in rupee terms.

In dollar terms, net income grew 6.3 per cent YoY to $984 million in Q2 from $926 million in like period year ago, while gross income increased 5.3 per cent to $4,374 million ($4.4 billion) from $4,156 million ($4.2 billion) in same period year ago under the International Financial Reporting Standard (IFRS).

Sequentially, net grew 4.7 per cent from $940 million but revenue growth remained flat (0.3 per cent) from $4,362 million in dollar terms.

“It has been an unusual Q2′ for us. Growing uncertainties in the environment is creating caution among customers and resulted in holdbacks in discretionary spending this quarter,” said TCS Chief Executive N. Chandrasekaran in a statement later.

Admitting that volatility in markets like India and Latin America muted revenue growth, the top executive said the second quarter was profitably good despite multiple headwinds and stronger on margin front.

Operating profit for the quarter grew 3.6 per cent YoY to Rs 7,617 crore from Rs 7,354 crore year ago and 3.7 per cent from Rs 7,347 crore quarter ago, while operating margin increased 94 basis points sequentially to 26 per cent.

“With technology increasingly at the forefront of business, we are confident that this is temporary. We continue our tradition of investing in building IP (Intellectual Property), solutions and talent for the future,” added Chandrasekaran.

The outsourcing firm added one client in $50-million revenue band and six in $20-million band.

“From a geography perspective sequentially, Europe saw strong growth at 3.7 per cent, Asia-Pacific at 3.5 per cent while North America grew 1.4 per cent though Britain was flat,” said Chief Financial Officer Rajesh Gopinathan.

Revenue declined 7.6 per cent in India and was volatile in Latin America.

Life Sciences and Healthcare led revenue growth sequentially in constant currency at 4.7 per cent, followed by Energy & Utilities 3.6 per cent, Manufacturing 3.1 per cent, Travel & Hospitality 2.3 per cent and Communication & Media 2 per cent.

Though the company and its subsidiaries the world over hired 22,665 people during the quarter, the net addition was 9,440 as 13, 225 techies left, taking the total to 371,519 at the end of September 30.

The attrition rate, however, declined to 11.9 per cent from 12.9 per cent year ago, while the percentage of women rose to an all-time high of 34.3 per cent.

“We continue to hire in line with business demands and engage with our employees to help them learn and equip with new skills to succeed in a digital world,” said Human Resources global head Ajoy Mukherjee.

About 180,000 techies were trained to gain expertise in digital technologies.

“We are focused on building a team of global professionals with diversity and multiple skill-sets. The process of on-boarding this year’s campus trainees continues at the normal pace,” added Mukherjee.

The company’s blue scrip of Re 1 face value declined Rs 51.60 to Rs 2,328.50 when trading ended on the BSE from Wednesday’s closing price of Rs 2,380.10.

Opening at Rs 2,355, the company’s shares touched a high of Rs 2,367.85 and a low of Rs 2,323.25 during the intra-day trading sessions.

–IANS

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