TCS Q2 Results: Net profit rises 8.7% on year to ₹11,342 crore; declares dividend

TCS Q2 earnings: Information Technology (IT) services major, Tata Consultancy Services (TCS) Ltd on Wednesday reported an 8.7% year-on-year rise in its consolidated net profit (attributable to shareholders of the company) for the fiscal's second quarter ended September (Q2FY24) to ₹11,342 crore. The company had reported a profit of ₹10,431 crore in the year-ago period. Sequentially, the consolidated net profit was up 2.4%. TCS shares ended at ₹3,610.20 apiece, down 0.52% on BSE.

The IT company's consolidated revenue from operations stood at ₹59,692 crores during the quarter ended September from ₹55,309 crore in Q2FY23, a year-on-year jump of nearly 8%. Sequentially, the growth was muted, up by 0.5% from ₹59,381 crore in Q1FY24.

The company's consolidated total income for the quarter ended September surged by nearly 8% year-on-year to ₹60,698 crore. 

According to the exchange filing, operating margin, or EBIT, for the quarter ending in September was 24.3%, an increase of 0.3% year over year.

“Our focus on improving employee utilisation, while driving productivity improvement and cost efficiency across the organisation, has helped us expand our operating margin to 24.3%. We will continue to push the growth, efficiency and innovation levers to further improve our profitability. In keeping with our shareholder friendly capital allocation policy, the Board has recommended a share buyback to the tune of ₹17,000 crore at ₹4,150 per share," said Samir Seksaria, Chief Financial Officer of TCS. 

With $11.2 billion worth order wins for the second quarter of FY24, TCS's order book improved quarter-on-quarter (QoQ).

“Strong deal momentum delivered us a very large order book in Q2 – our second highest TCV ever in a quarter, and good pipeline," said K Krithivasan, Chief Executive Officer and Managing Director of TCS.

In constant currency (CC) terms, TCS' Q2 revenue grew 2.8% YoY.

According to the company's exchange, the verticals with the highest growth rates were manufacturing (5.8%), life sciences and healthcare (5%), and energy, resources, and utilities (14.8%). On the other side, BFSI was -0.5%, Communications & Media was -2.1%, Consumer Business Group (CBG) by rose by 1%, and Technology & Services was at -2.2%.

The United States rose by 10.7%, the United Kingdom by 1.3%, and North America by 0.1% among the major markets. India increased 3.9%, Asia Pacific expanded 4.1%, Latin America gained 13.1%, and the Middle East and Africa grew 15.9% in emerging markets, according to company's filing.