TCS profit up 9%, FY25 will be better than FY24: CEO
BENGALURU: The country’s largest IT services company Tata Consultancy Services (TCS) on Thursday reported a 8.7% increase in its consolidated net profit for the June quarter at Rs 12,040 crore, compared to Rs 11,074 in the same quarter last year.
The company’s revenue from operations for Q1 FY25 beat Street estimates and was at Rs 62,613 crore, a 5.4% increase YoY compared to Rs 59,381 crore. The IT firm’s operating margin for the quarter stood at 24.7%, an expansion of 1.5% YoY.
In June quarter, the company’s order book was at $8.3 billion, which is 18.6% lower compared to $10.2 billion total contract value (TCV) the company reported in the year-ago period.
Briefing the media, K Krithivasan, CEO and MD, said, “There is no specific delay in orders getting closed. In this particular quarter, we expected some projects to close but that did not close in Q1 and moved into Q2. There is nothing much to read in the order book and our pipeline is quite healthy.” He added that FY25 will be better than FY24. “We believe it is too early to call whether growth momentum is sustainable because market conditions continue to remain the same as it was in the last quarter and nothing to add in terms of market sentiment,” he said in a press conference.
For TCS, diversification of revenue is an important strategy, and in this quarter the growth driver was emerging markets, led by India, which grew 61.8%. North America was down 1.1% and Continental Europe grew 0.9%. As far as verticals are concerned, BFSI was down 0.9% YoY.
“Within BFSI, we had reasonable growth in North America, which is better than Europe this quarter. Within BFSI, we saw better growth in banking compared to the previous quarter,” the CEO said. Also, the AI and Gen AI pipeline has doubled to $1.5 billion for TCS.
Samir Seksaria, Chief Financial Officer, said, “In spite of the usual impact of the annual wage increments in this quarter, we have delivered strong operating margin performance, validating our efforts towards operational excellence.”
The company has declared an interim dividend of Rs 10 per share and it will be paid on August 5, 2024.
Q1 Earnings
Net profit at Rs 12,040 cr, up 8.7% YoY
Revenue at Rs 62,613 crore, up 5.4% YoY
Operating Margin at 24.7%; an expansion of 1.5% YoY
Net headcount addition of 5,452
TCS workforce stood at 606,998 as of June 30
LTM IT Services attrition rate at 12.1%
Dividend per share: Rs 10