TCS June quarter profit rises 17% to Rs 11,074 crore on deal wins, beats estimates

Tata Consultancy Services (TCS), the country's largest software services exporter on Wednesday, July 12, reported 17 per cent rise in quarterly profit helped by large deal wins and beating analysts estimates.

Strong Q1 Earnings For TCS 

TCS consolidated net profit rose to Rs 11,074 crore in the first quarter that ended on June 30, from Rs 9,478 crore in the year-ago period.

Its revenue from operations rose 12.55 per cent to Rs 59,381 crore from Rs 52,758 crore during the same period last year.

Its revenue in constant currency terms rose 7 per cent and operating margin came in at 23.2 per cent.

Analysts on average had expected a profit of Rs 10,904 crore, according to Refinitiv IBES data.

TCS is the first among its peers to report quarterly results, setting the tone for a $245 billion industry that is staring at a recession in major markets like the United States and Europe.

TCS Order Book

TCS said its order book for the April-June period stood at $10.2 billion against $8.2 billion a year ago.

“It is very satisfying to start the new fiscal year with a string of marquee deal wins. We remain confident in the longer-term demand for our services, driven by the emergence of newer  technologies. We are investing early in building capabilities at scale on these new technologies, and in research and innovation, so we can maximize our participation in these opportunities,” said K Krithivasan, Chief Executive Officer and Managing Director of TCS.

Growth was led by life sciences and healthcare which grew 10.1 per cent and the manufacturing vertical which grew 9.4 per cent. BFSI grew 3 per cent, retail and CPG grew 5.3 per cent, technology & services grew 4.4 per cent while communications & media grew 0.5 per cent, TCS said in a press release.

Among major markets, the United Kingdom led the growth in Q1 with 16.1 per cent growth; North America grew 4.6 per cent and Continental Europe grew 3.4 per cent. In emerging markets, Middle East & Africa grew 15.2 per cent, India grew 14 per cent, Latin America grew 13.5 per cent, and Asia Pacific grew 4.7 per cent.

“TCS was selected by Nest, UK’s largest workplace pension scheme, to digitally transform its scheme administration services with a future-ready, digitally enabled, omnichannel platform powered by TCS BaNCS™. TCS will leverage the latest technologies and data analytics to deliver enhanced,  personalised, and self-directed experiences to members. This will enable Nest’s 12 million members and 1 million employers to access the right information at the right time, in the way that suits them best,” TCS said. 

TCS witnessed strong demand for cloud computing solutions. 

Clients continue to invest in building a strong cloud foundation for business innovation. Cloud migration, data modernisation and application modernisation coupled with new digital technologies such as AI continue to drive growth. TCS’ investments in deepening competencies and building new capabilities have yielded good results. It is a launch partner for the hyperscalers in multiple new technology launches, including generative AI. TCS has around 148,000 employees with hyperscaler cloud certifications, one of the highest in the industry, TCS added. 

TCS shares closed 0.4 per cent lower at Rs 3,260 ahead of its earnings announcement.