Net profit up 5.2% to Rs 9,478 Crore; Revenues jump 16.2%; Dividend declared

TCS Q1 results: India’s largest IT services company, Tata Consultancy Services (TCS), on Friday announced a consolidated net profit of Rs 9,478 crore for the June quarter 2022, a jump of 5.2% on an annual basis. The company’s revenue from April to June 2022 increased by 16.2% to Rs 52,758 crore from Rs 45,411 crore a year ago.

The company’s net profit was Rs 9,031 crore in the corresponding period of the previous fiscal year.

On a sequential basis, the net profit of TCS registered a decline of 4.82% from Rs 9,959 crore in the previous quarter. Its revenue saw an increase of 2.29% quarter on quarter from Rs 51,572 crore.

TCS’ total expenditure in the June quarter of 2022 jumped 19.95% to Rs 40,572 crore from Rs 33,823 crore in the corresponding period last year. His wage costs also rose by 18.23% to Rs 30,327 crore from Rs 25,649 crore, according to a BSE filing.

The company saw a net increase in headcount of 14,136 employees in the June 2022 quarter. The company’s total headcount was 6,06,331 as of June 31, 2022, according to the filing.

Its information technology (IT) services churn rate was 19.7% in the June 2022 quarter, up from 17.4% in the prior quarter, TCS said. .

During the quarter, TCS overseas growth was led by North America which increased by 19.1%, followed by the UK (12.6%) and Continental Europe (12 .1%). Among emerging markets, Latin America grew 21.6%, India jumped 20.8%, Asia-Pacific 6.2%, and the Middle East and South Africa 3.2%, he added.

In terms of segment, TCS growth was led by retail and CPG, which grew 25.1%; followed by communications and media (19.6%), vertical manufacturing (16.4%), technology and services (16.4%), BFSI (13.9%) and life sciences and healthcare (11.9%).

TCS Q1 results: dividend declared

The company also declared its interim dividend. “We would like to inform you that at the Board meeting held today (Friday), the directors declared an interim dividend of Rs 8 per share of Rs 1 each of the company,” he said in a BSE filing. The record date has been set for July 16 and the payment date will be August 3.

The company’s earnings per share also increased to 25.9 rupees in the June 2022 quarter from 24.35 rupees a year ago.

On Friday, shares of TCS fell by Rs 22.10, or 0.67%, to close at Rs 3,264.85 each on BSE.

TCS Q1 results: what management says

Rajesh Gopinathan, Chief Executive Officer and Chief Executive Officer of TCS, said, “We are starting the new fiscal year on a high note, with overall growth and deals closed across all of our segments. Pipeline velocity and deal closures continue to be strong, but we remain vigilant given macro-level uncertainties. Our new organizational structure has taken hold, bringing us closer to our customers and making us more agile in a dynamic environment. Looking ahead, we remain confident in the resilience of technology spending and the secular tailwinds driving our growth.

Its chief financial officer, Samir Seksaria, said the quarter was difficult from a cost management perspective. The company’s 23.1% operating margin in the first quarter reflects the impact of its annual salary increase, the high cost of managing talent turnover and the gradual normalization of travel expenses.

“However, our longer-term cost structures and relative competitiveness remain unchanged and position us well to continue our profitable growth trajectory,” Seksaria added.

In the previous quarter of January to March 2022, TCS recorded a 7.35% year-on-year increase in consolidated net profit to Rs 9,959 crore. Its net profit had stood at Rs 9,246 crore in the prior year period.

TCS revenue stood at Rs 51,572 crore in the March 2022 quarter, a jump of 15.75% from the previous year’s Rs 43,705 crore. Its total expenditure also increased by 18.74% to Rs 37,963 crore from Rs 31,971 crore a year ago. TCS’ consolidated operating profit increased by 6.79% to Rs 12,383 crore from Rs 11,596 crore earlier.

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