TCS sure of clocking double-digit growth in FY19 after stellar Q2

TCS sure of clocking double-digit growth in FY19 after stellar Q2
TCS sure of clocking double-digit growth in FY19 after stellar Q2

After delivering a “landmark quarter,” IT bellwether TCS is confident of ending the year with double-digit growth. The country’s largest software exporter posted a 22.6 per cent jump in consolidated net profit at Rs 7,901 crore in September quarter, compared with a net profit of Rs 6,446 crore in the year-ago period. Revenues grew 20.7 per cent at Rs 36,854 crore in the quarter, up from Rs 30,541 crore a year ago. Its earning per share was at Rs 20.66. In constant currency terms, revenues were up 11.50 per cent year-on-year.

“On a one-time departure from our typical stance, I want to share that we have the numbers on the board and the momentum to ensure that the double-digit trajectory continues for the rest of the year. The journey has been a reaffirmaton of TCS strategies... It has been a landmark quarter for us,” TCS CEO & MD Rajesh Gopinath told reporters.

“This enables us to strategically focus on the medium and long-term,” he added, while indicating that growth has been coming from areas where

the company have been investing.
The growth in the reporting quarter was driven by expanding demand for digital transformation across verticals, and continued acceleration in banking, financial services and insurance (BFSI) and retail.

BFSI and retail verticals continue to accelerate by 6.1 per cent and 15.6 per cent year-on-year, respectively. V Ramakrishnan, chief financial officer, TCS, said, “It is encouraging to be back in our preferred range of profitability at the operating level. Even as we expand our investments to build on our lead in the digital space, our disciplined operations, the improving growth trajectory and a supportive currency make our margins resilient.”

The company’s operating margin, an indicator of profitability, expanded 144 basis points year-on-year to 26.5 per cent. The UK and Europe led the growth for the company at 22.8 per cent and 17.4 per cent, respectively. The company added four new clients in the $100 million-plus band during the quarter. The firm also saw the highest net additions in terms of hiring in the last 12 quarters, adding 10,227 employees in the September quarter. Total employees strength at the end of Q2 stood at 411,102 on a consolidated basis.

The company declared a dividend of Rs 4 per share during the quarter.

Ahead of its second quarter earnings, TCS’ shares fell by 3.10 per cent to close at Rs 1,979.75 apiece on the BSE, against a 2.19 per cent decline in the benchmark.