TCS Q2 results: Profit dips 7% YoY to Rs 7,475 crore; declares Rs 12 interim dividend

Tata Consultancy Services (TCS), the country's largest software exporter, on Wednesday reported a 7.05 per cent year-on-year decline in its consolidated net profit at Rs 7,475 crore for the second quarter ended September 30, 2020. The Mumbai-headquartered company had posted consolidated net profit of Rs 8,042 crore in same quarter of last financial year, TCS said in a regulatory filing. On the quarterly basis, the consolidated profit rose 6.66 per cent from Rs 7,008 crore in June quarter of current financial year 2020-21.

The IT major posted revenue from operations of Rs 40,135 crore, as compared to Rs 38,977 crore in the year ago period, registering a year-on-year growth of 3 per cent. On the sequential basis, the revenue grew 4.73 per cent from Rs 38,322 crore in the April-June period of FY21.

On the operating front, consolidated earnings before interest and tax (EBIT) jumped 16.3 per cent QoQ to Rs 10,689 crore, while margin stood at 26.2 per cent during July-September quarter.

Industry wise, revenue growth for Q2 FY21 was led by retail and consumer packaged goods (CPG) which grew 8.8 per cent, followed by 6.9 per cent and 6.2 per cent growth in life sciences and healthcare and BFSI segment, respectively. Among others, technology and services grew 3.1 per cent, manufacturing 1.4 per cent, while communications and media de-grew by 2.4 per cent.

TCS recorded good sequential growth in all markets, with North America growing 3.6 per cent, UK 3.8 per cent, and Continental Europe 6.1 per cent. Emerging markets also grew well, with India growing 20 per cent, MEA by 8 per cent, Latin America 5.5 per cent and Asia Pacific 2.9 per cent.

As on September 30, 2020, consolidated headcount of the company stood at 4,53,540, of which women constituted 36.4 per cent. TCS continues to be the global industry benchmark in talent retention, with the IT services attrition rate (LTM) at 8.9 per cent, an all-time low, it said.

Commenting on Q2 results, Rajesh Gopinathan, Chief Executive Officer and Managing Director of TCS, said, "Driving accelerated business value realisation of our customers' digital investments has resulted in broad-based revenue growth. The strong order book, a very robust deal pipeline, and continued market share gains give us confidence for the future."

"What we are witnessing right now is the start of the first phase of a multi-year technology transformation cycle. In the current phase, enterprises are building a cloud-based foundation that will serve as a resilient, secure and scalable digital core. In subsequent phases, we will see the native capabilities of these platforms being utilised to create innovative new business models and differentiated customer experiences," he added.

The board of TCS, at its meeting held today, declared a second interim dividend of Rs 12 per equity share of Re 1 each of the company.

"The second interim dividend will be paid on November 3, 2020 to the equity shareholders of the company, whose names appear on the Register of Members of the company or in the records of the depositories as beneficial owners of the shares as on October 15, 2020 which is the record date fixed for the purpose," TCS said.

The board also approved a proposal to buy back up to 5.33 crore equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore, amounting to 1.42 per cent of the total paid-up equity share capital, at Rs 3,000 per equity share (referred to as the 'buyback price').

Ahead of Q2 results, TCS shares ended 0.78 per cent higher at Rs 2,737.40 apiece on the BSE ahead of results announcement.

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