One of the leading software services provider Tata Consultancy Services (TCS) has reported 7.6% sequential growth in the second quarter on profit to Rs 7,901 crores with growth across sectors. The year-on-year growth was 22.6 %.
Profit in June quarter stood at Rs 7,340 crores.
Revenue from operations grew by 7.6% quarter-on-quarter (up 20.7% YoY) to Rs 36,854 crores for the quarter ended September 2018, run by strong digital growth.
In dollar terms, the company reported 3.2 % sequential growth in top line to $5,215 million while revenue growth in constant currency terms was 3.7 % QoQ, which was largely in line with expectations.
Digital business, which contributed to total revenue increased to 28.1% against 19.7% in the same quarter last year, grew 16.5% sequentially and 59.8% year-on-year in constant currency terms.
The company remained confident about its double-digit growth this year due to strong digital business and improving sectoral performance.
“We have the numbers to ensure that double-digit constant currency growth continues this year,” Gopinathan said, adding the company will now shift its focus to medium & long-term growth and is confident of the business environment & deal pipeline.
Q2 has been a landmark quarter in many ways. Two years back, TCS slipped from a typical digit growth trajectory and since then we have been very focused on getting back on the trajectory.
He further said their interactions with clients gave a positive outlook on a budget but it is too early to talk about it.
On the operational front, earnings before interest and tax (EBIT) grew by 13.9% to Rs 9,771 crores with margin expansion of 147 basis points on a sequential basis, thanks to rupee depreciation and absence of wage hikes.
The Indian rupee depreciated by 5.87 % during the quarter to 72.49 against the US dollar.
Among verticals, the Tata Group firm said revenue growth accelerated in BFSI to 6.1% (YoY) during the quarter against 4.1 % in Q1, and Retail & CPG to 15.6% (YoY) against 12.8 % in previous quarter. In constant currency respectively, BFSI and retail & CPG grew 3.5% and 3.4% QoQ respectively while communication & media was flat QoQ.
North America business showed 2.6% sequential growth (8.1% YoY compared to 7% in Q1), Continental Europe 4.1% and UK 6 % in constant currency terms also led overall revenue growth for the quarter.
The software services exporter has added 4 new clients in $100 million or more category, 7 clients in $20 million and 10 in $10 million or more category.
TCS has added 10,227 employees on a net basis during the quarter, the highest net addition in the last 12 quarters. “Total employee strength at the end of Q2 stood at 4,11,102 on a consolidated basis.”
At the end of September quarter, the IT services attrition rate was steady at 10.9% (last twelve months).
As of September 2018, the company has applied for 4,185 patents, including 207 applied during the quarter and has been granted 782 patents.
Board of directors of the company declared a second interim dividend of Rs 4 per equity share for the quarter.
The stock price fell 3% (on top of 2 % correction in the previous session) ahead of quarterly earnings announced market hours.
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