Mumbai: (L-R) Milind Lakkad, EVP and CHRO; K. Krithivasan, CEO and MD; Samir Seksaria, CFO, Tata Consultancy Services (TCS) during the announcement of the Q1 financial results 2024-25 at a press conference, in Mumbai, Thursday, July 11, 2024.
PTI
Bengaluru: India’s top software exporter Tata Consultancy Services (TCS) posted a 5% growth in its consolidated net profit at Rs 11,909 crore for the July- September (Q2FY25) quarter, on Thursday. Revenue from operations grew by 7.6% year-on-year (YoY) to Rs 64,259 crore.
“We saw the cautious trends of the last few quarters continue to play out in this quarter as well,” said K Krithivasan, chief executive officer and managing director in a press release.
The company cancelled its post-earnings media briefing due to the demise of Tata Group’s Chairman Emeritus Ratan Tata.
TCS’ consolidated operating margin stood at 24.1%, posting a decline of 0.2% on an annual basis while net margin stood at 18.5%. Order wins stood at $8.6 billion for Q2, a YoY decline of 23%.
Commenting on the hiring scenario, Milind Lakkad, Chief HR Officer, said, “We have commenced the campus hiring process for FY26.” TCS hired 11,000 trainees in the first quarter of the current fiscal year.
On the other hand, it reported a slight increase in its attrition rate for the second quarter, which rose to 12.3% from 12.1% sequentially. Its employee base increased to 5,726, marginally higher than 5,452 in Q1.
“Amidst an uncertain geopolitical situation, our biggest vertical, BFSI, showed signs of recovery,” said Kirthivasan. It may be recalled that the banking, financial services and insurance (BFSI) segment has been a laggard, with this quarter having seen an uptick of barely 0.1% on an annual basis.
Manufacturing was the fastest growing segment at 5.3%, accounting for just below 9% revenue share. TCS’ India market grew significantly, by 95% y-o-y, however, North America continued to remain under pressure, posting a degrowth of 2.1%.
While the results are largely in line with expectations, better performance is expected towards the end of the year, analysts told DH.
“Outcome of the US elections in November and what happens from there, might lead to some improvement. Moreover, the stabilisation in attrition rate is a good sign,” said Deepak Jotwani, Vice President & Sector Head at ICRA.
“TCS's financial results show a moderate sequential growth of 2.6% and it is expected to continue a steady growth, with an increased focus on GenAI,” said Biswajit Maity, senior analyst, Gatner.