TCS Q1 results: Net profit grows 8.7% to ₹12,040 crore

TCS reported a 5.4% increase in its revenue at ₹62,613 crore for the quarter just ended

TCS’ net profit fell 3.1% compared to March quarter. File | Photo Credit: Reuters

Tata Consultancy Services Ltd (TCS) reported consolidated first quarter net profit grew 8.7% year on year (YoY) to ₹12,040 crore despite degrowth in several business YoY. Net margin for the quarter ending June 30, 2024 was at 19.2%, India’s biggest IT company by revenue said in a filing with exchanges.

Revenue for the quarter at ₹62,613 crore grew 5.4% and 4.4% YoY in constant currency. Operating margin at 24.7% has seen an expansion of 1.5% YoY.

Net cash from operations at ₹11,168 crore was 92.8% of net profit, the company said. The board has approved a dividend of ₹10 per share.

Commenting on the results K Krithivasan, Chief Executive Officer and Managing Director, TCS said: “I am pleased to report a strong start to the new fiscal year with all-round growth across industries and markets.” 

“We are continuing to expand our client relationships, create new capabilities in emerging technologies and invest in innovation, including a new AI-focused TCS PacePor in France, IoT lab in the U.S. and expanding our delivery centers in Latin America, Canada and Europe,” he added.

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.” 

“We remain focused on making the right investments in R&I and talent, strengthening our superior return ratios and creating long term value for our stakeholders,” he added.

During the quarter the North American market de-grew by 1.1% YoY to 49.5% in terms of constant currency from 52% in the year ago period. Latin America grew 6.3% yoY, UK grew 6%, Continental Europe grew by 0.9%, Asia pacific by 7.6%, India frew by 61.8% and MEA by 8.5%.

Among the businesses BFSI degrew 0.9% in constant currency YoY, consumer business degrew by 0.3%, Technology & Services degrew by 3.9%, Communication & Media degrew by 7.4%. While Life Science & Healthcare grew by 4%, Manufacturing grew by 9.4% YoY. Similarly Energy Resources & Utilities grew by 5.&% and Regional markets & others grew by 37.7%.  

The net headcount addition during the quarter was 5,452 and the LTM attrition was further down to 12.1%. 

TCS’ workforce stood at 606,998 as on June 30, 2024. IT services’ attrition was at 12.1% for the last twelve months.

Milind Lakkad, Chief HR Officer, Chief HR Officer, TCS  said: “We have successfully completed our annual increment process. Our continued focus on employee engagement and development led to industry-leading retention and strong business performance, with the net headcount addition being a matter of immense satisfaction.”