TCS Q1 results: Net profit comes in at Rs 11,074 crore, beats estimates

TCS Q1 results: Tata Consultancy Services (TCS) reported on July 12 a consolidated net profit of Rs 11,074 crore for the quarter ended June 30, 2023 (Q1FY24). On a year-on-year (YoY) basis, the profit grew 16.8 per cent while on a QoQ basis, the profit declined 2.79 per cent. Revenue from operations came in at Rs 59,381 crore, up 12.5 per cent on a year-on-year (YoY) basis. On a sequential basis, revenue grew 0.37 per cent. The bottom line beat analysts' expectations. Zee Business Research had estimated the net profit to come in at Rs 10,900 crore while Nirmal Bang Securities had estimated the profit after tax (PAT) at Rs 10,855.5 crore. Revenue in constant currency (CC) terms grew 7 per cent YoY, the company said.

The company's order book during the quarter under review stood at $10.2 billion and the book-to-bill ratio was 1.4. The book-to-bill ratio compares the number of new orders obtained to the number of goods and services billed in a measurement period.

Commenting on the Q1 results, K Krithivasan, Chief Executive Officer and Managing Director said: "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 maximise our participation in these opportunities."

Source: TCS' earnings release

TCS Q1: Check key updates

Q1 Segment Highlights

Industries: 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 and communications and media grew 0.5 per cent.

Markets: Among major markets, the United Kingdom led with 16.1 per cent growth; North America grew 4.6 per cent and Continental Europe grew 3.4 per cent. In emerging markets, the Middle East and 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.

Services: Clients continue to reprioritise, preferring business-critical projects and those with a faster return on investment (ROI). Cost optimisation, vendor consolidation, and integrated operations are high priorities. Enhanced flexibility, resilience, and the establishment of a solid foundation continue to drive transformation initiatives, TCS said. 

Growth was led by cloud modernisation, cyber security, the Internet of Things (IoT), and digital engineering, TCS said in its earnings statement.

TCS interim dividend

TCS's board declared an interim dividend of Rs 9 per equity share of Rs 1 each. "The interim dividend shall be paid on Monday, August 7, 2023, 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 of Thursday, July 20, 2023, which is the Record date fixed for the purpose," the company's statement read.

TCS: Annual Salary increase

“We have gone ahead and rolled out our annual salary increase with effect from April 1. Our operating margin of 23.2 per cent reflects the 200-bps impact of this hike, offset through improved efficiencies. At the same time, we continue to make the investments needed to power our future growth, including expansion of our delivery and research infrastructure," said Samir Seksaria, Chief Financial Officer.