BENGALURU: Buoyed by strong demand in digital services, India’s largest software exporter, Tata Consultancy Services (TCS), delivered robust profit growth for the second quarter of fiscal 2019. The net profit of the Tata group company met the Street’s expectations and grew 22.7 per cent during the July-September quarter to Rs 7,901 crore. The firm had posted net profit of Rs 6,446 crore during the same period last year.
The total revenue of the IT major for the three-month period ended September 30, 2018, saw a jump of 20.7 per cent and stood at Rs 36,854 crore, up from Rs 30,541 crore last year. On a sequential basis, the company’s profit grew over 7.5 per cent. The TCS share price declined by 3.10 per cent and closed at Rs 1,979.75 even as it announced the results post trading hours.
Commenting on the company’s performance, Rajesh Gopinathan, CEO and MD, said: “The revenue growth was driven by expanding demand for digital transformation across verticals, and continued acceleration in BFSI and Retail. Our industry-leading digital growth and best-in-class client metrics bear testimony to our standing as the preferred partner in our customers’ growth and transformation initiatives.”
During the quarter, the operating margin stood at 26.5 per cent, a year-on-year expansion of 1.4 per cent. The firm also announced an interim dividend of rupees four per share.
“TCS’ performance in the current quarter is partly fortuitous and partly a result of its relentless pursuit of digital transformation opportunities in large global organisations. The good fortune part of it comes from the weakening of the rupee to unprecedented levels, resulting in TCS’ dollar and other global incomes to be even more valuable when converted to the rupee, passing on directly to the bottom line of their profit and loss account,” said Sanjoy Sen, Doctoral Research Scholar, Aston Business School, UK.
In dollar terms, the revenue was $5.215 billion and profit was $1.119 billion.
During the quarter, the company continued to witness a strong revival of its major vertical Banking Financial Services and Insurance business (BFSI). The BFSI and retail verticals continued to accelerate with a year-on-year growth of 6.1 per cent and 15.6 per cent, respectively. The company also saw strong performance in other verticals: Energy and Utilities and Life Sciences and Healthcare grew at 22.2 per cent and 14.7 per cent, respectively.
During the quarter, TCS made the highest net addition of people in the last 12 quarters at 10,227, taking the total headcount to 411,102 people on a consolidated basis.