TCS Q2 profit up 2% at Rs 8,042 crore, misses estimates

Tata Consultancy Services (TCS), the country's largest software exporter, has kicked-off earnings season on a subdued note, posting lower-than-expected numbers for the second quarter ended September 30, 2019.

IT bellwether Tata Consultancy Services (TCS) has reported a 1.8 per cent year-on-year (YoY) growth in net profit at Rs 8,042 crore for the second quarter ended September 30, 2019.

"The country's largest software exporter had posted a net profit of Rs 7,901 crore in the same quarter last year," TCS said in a filing to the Bombay Stock Exchange.

Revenue for the July-September quarter climbed 5.8 per cent YoY to Rs 38,997 crore from Rs 36,854 crore in the same period last year. Revenue growth in constant currency terms stood at 8.4 per cent on a yearly basis.

The Mumbai-headquartered firm said that revenue growth was broad-based across verticals, led by 16 per cent growth in life sciences & healthcare division, followed by 11.8 per cent in communications & media segment. "All the other verticals -banking, financial services and insurance (BFSI) (8 per cent), manufacturing (7.8 per cent), technology & services (5.6 per cent) and retail & CPG (4.8 per cent) -continued to grow."

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Market wise, TCS earnings were benefitted from 16 per cent growth in Europe business, followed by 13.3 per cent in United Kingdom. North America and Asia Pacific grew 5.3 per cent and 6.5 per cent respectively. Emerging markets showed steady growth -India (7.7 per cent), MEA (7.3 per cent) and Latin America (7.3 per cent).

Commenting on Q2 earnings, Rajesh Gopinathan, CEO and MD, said: "We ended the quarter with steady growth despite increased volatility in the financial services and retail verticals. We remain confident as the medium and longer term demand for our services continues to be very strong, as evidenced by our Q2 order book -the highest in the last six quarters.

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The company's board has also declared a second interim dividend of Rs 5 and a special dividend of Rs 40 per equity share of Rs 1 each, which will be paid on October 24, 2019 to the equity shareholders of the company.

Ahead of Q2 earnings, TCS shares closed trade at Rs 2,004.40 apiece, down 0.80 per cent, on the BSE on Thursday.

Edited by Chitranjan Kumar