Tata Consultancy Services Q1 Results: Strong Profit, Weak Revenue Growth and Other Key Highlights
TCS is expected to report highest revenue growth among its tier-I peers, with a constant currency growth of 3% over the previous quarter aided by robust deal wins.
Tata Consultancy Services (TCS).
Tata Consultancy Services Ltd (TCS) on Wednesday posted its June quarter earnings that took the markets by surprise. Though, TCS’ Q1 profit beat analyst estimates, but revenue was much below expectations.
Here are 10 key takeaways from TCS Q1 results:
— TCS reported profit of Rs 8,131 crore for the quarter ended June, flat sequentially when compared with the March quarter’s profit of Rs 8,126 crore. However, year-on-year, it grew 10.78%.
— The rupee revenue grew 0.4% sequentially to Rs 38,172 crore for the June quarter. Year-on-year, the revenue growth was at 11.4%.
— TCS Q1 dollar revenue stood at $5,485 million, up 8.6% compared with a year ago.
— Constant currency revenue growth for the June quarter stood at 10.6% year-on-year, the fourth consecutive quarter of double digit growth, against 12.7% in the March quarter and 9.3% in the June 2018 quarter.
— Operating margin stood at 24.2%, while net margin was 21.3%. TCS had posted operating margin of 25.1% in FY19.
— Digital revenues, which formed one-third of total revenues, grew a whopping 42.1% year-on-year for the June quarter.
— Revenue growth was broad-based across verticals. Life Sciences and Healthcare led the pack, growing 18.1%. The other verticals—BFSI (9.2%), Retail and CPG (7.9%), Communications and Media (8.4%), Technology and Services (7.8%) and Manufacturing (5.5%)—all showed industry-leading growth rates.
— Geographically, the growth was led by the UK region (16%), India (15.9%) and Europe (15%). Other markets like North America (7.7%), Asia Pacific (9.5%), MEA (6.4%) and Latin America (6.4%) also showed good momentum.
— Strong hiring in Q1 resulted in a net addition of 12,356 employees, the highest in the last five years. TCS has issued joining letters to over 30,000 fresh graduates. Almost 40% of them have been hired in Q1 and the rest are expected to join by Q2, the company said in a statement.
— The board of directors declared an interim dividend of Rs 5 per equity share of Re 1 each of the company. It will be paid on Tuesday, 23 July 2019, to TCS shareholders.
— TCS said it has so far applied for 4,682 patents, of which 86 were applied during the June quarter itself, and has been granted 1,022 patents.
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