IT services major Tata Consultancy Services (TCS) on July 8 said its consolidated net profit for the quarter ended June 2022 increased 5.21 percent to Rs 9,478 crore, compared to Rs 9,008 crore in the same quarter last year. Sequentially, the profit declined 4.51 percent.
Revenue from operations during the quarter came in at Rs 52,758 crore, which was 16.17 percent higher from the year-ago quarter and 4.28 percent from the previous quarter.
ALSO READ: TCS attrition rises 19.7% in Q1FY23, 14,136 employees added during the quarter
The company said its constant currency (cc) revenue growth was at 15.5 percent year-on-year (YoY). Operating margin was at 23.1 percent, registering a contraction of 2.4 percent YoY.
TCS announced a dividend of Rs 8 per share, which will be credited by August 3, 2022. The record date for the same is July 16, 2022.
IT services attrition continued to climb and was 19.7 percent on the last twelve months’ basis, the company said in an exchange filing. In the March quarter, it was at 17.4 percent. Net headcount addition - which many believe to be leading indicator of future demand - during the period was 14,136, much lower than 35,209 employees in previous quarter. The company gradually accelerated its return to office program in Q1, with about 20 percent of the workforce now working from office.
The deal win also declined to $8.2 billion during the quarter from $11.3 billion in the previous quarter. The firms said it added nine new clients to the $100 million+ band YoY and 19 clients to the $50 million+ band.
“We are starting the new fiscal year on a strong note, with all-round growth and strong deal wins across all our segments,” said Rajesh Gopinathan, Chief Executive Officer and Managing Director, TCS. “Pipeline velocity and deal closures continue to be strong, but we remain vigilant given the macro-level uncertainties. Looking ahead, we remain confident in the resilience of technology spending and the secular tailwinds driving our growth.”
Net cash from operations was at Rs 10,810 crore – 114.1 percent of net income, the company said.
“It has been a challenging quarter from a cost management perspective. Our Q1 operating margin of 23.1 percent reflects the impact of our annual salary increase, the elevated cost of managing the talent churn and gradually normalizing travel expenses,” said Samir Seksaria, Chief Financial Officer, TCS.
“However, our longer-term cost structures and relative competitiveness remain unchanged, and position us well to continue on our profitable growth trajectory.”
Segment performance
TCS said growth during the quarter was led by Retail and CPG (25.1 percent), Communications & Media (19.6 percent), Manufacturing vertical (16.4 percent) and Technology & Services (16.4 percent). BFSI grew 13.9 percent, while Life Sciences and Healthcare grew 11.9 percent.
Region wise, North America led with 19.1 percent growth, continental Europe grew 12.1 percent and UK grew 12.6 percent. In emerging markets, India grew 20.8 percent, Asia Pacific grew 6.2 percent, Latin America grew 21.6 percent, and Middle East & Africa grew 3.2 percent, the firm said.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!