TCS Q2 net falls 2% to Rs 6600 cr yoy

Brunilde Fioravanti
Октября 12, 2017

TCS posted a net profit of Rs 64.46 billion (USD 990 million) in the three months to Sept 30, beating analysts' average estimate of Rs 63.06 billion, Thomson Reuters data showed. It reported a 10 per cent sequential fall in profits to Rs 5,945 crore and revenue dipped by 0.2 per cent to Rs 29,584 crore. The revenue expansion was driven by strong business volumes that grew more than 3% sequentially, he said. It also snatched clients from rivals to grow its digital business by 31 per cent over the year to contribute 19.7 per cent to its revenues.

For the quarter just gone by, in the current fiscal year that ends March 2018, the performance has been "very satisfying, striking a good balance between pursuing revenue growth, particularly in digital opportunities, while tightening our execution to deliver greater efficiency", said N Ganapathy Subramaniam, COO at TCS. In the first quarter, the company had reported net profit of Rs 5,945 crore. "People are looking at multiple technologies and how to leverage them", he said.

TCS' profit was boosted by a 170 basis points increase in its EBIT margin or operating margin to 25.1 per cent in Q2.

According to HDFC Securities' Q2 results preview, TCS is expected to post 3.5-3.6 per cent quarter-on-quarter revenue growth.

"In retail we're seeing a significant amount of traction".

While outsourcing for legacy services grew marginally by 1.4 per cent, almost 44 per cent of the global contracts were in digital or deals that had vendors deliver product or solutions as a service.TCS said it won one client with $100 million, while six clients each in the band of $50 million, $20 million, and $10 million.

It added 15,868 employees in the quarter.

Digital services now account for close to a fifth of its revenues, TCS, India's largest IT services company, which counts Lloyds Banking Group, BP PLC, Walmart, Boeing and Volkswagen as customers, said in a press release after the close of domestic trading on Thursday. Strong, broadbased client metrics this quarter demonstrates our Increasing success with newer customers. "Gopinathan said the firm expects growth to return in both banking and retail sectors as traditional firms overcome fears regarding disruption from fintech startups and online commerce companies".

Shares of the company gained Rs 48.05, or 1.92%, to settle at Rs 2,548.55.

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