TCS Q2 net profit crosses ₹10,000 cr for the first time, reports 10% sequential growth

• TCS crosses ₹10,000 crore quarterly profit for the very first time.
• The company reported a 10% sequential growth in net profit to ₹10,431 crore from ₹9,478 crore last quarter.
• The headwinds from the supply-side challenges are abating, said Samir Seksaria, chief financial officer of the company.

IT major TCS on Monday kickstarted the Q2 earnings season, crossing the ₹10,000 crore quarterly net profit mark for the first time. The company reported a 10% sequential growth in net profit to ₹10,431 crore from ₹9,478 crore in April-June.

Revenue for the quarter grew 4.8% on a sequential basis to ₹55,309 crore, while it grew 15.4% year-on-year, in constant currency. The revenue growth has beaten most analyst expectations - which was for a 3% rise sequentially.

“Demand for our services continues to be very strong. We registered strong, profitable growth across all our industry verticals and in all our major markets. Our order book is holding up well, with a healthy mix of growth and transformation initiatives, cloud migration and outsourcing engagements,” Rajesh Gopinathan, CEO and MD of TCS, said.

Its primary markets – North America and EU – delivered double digit growth. While North America surged 17.6% in constant currency terms, the UK surged 14.8% and the EU grew 14.1%.

This comes as the management says demand for services continues to be ‘very strong’ with growth across verticals – the company’s order book stood at $8.1 billion at the end of the September quarter.

“We are steadily making our way towards achieving our operating margin priority for the year, aided by leverage from good growth, the flattening of the workforce pyramid, steadily improving productivity and currency support. Very importantly, the headwinds from the supply-side challenges are abating, so that sets us up well for the seasonally weak second half of the year,” said Samir Seksaria, chief financial officer of the company.
Source: Company reports

The communications segment emerged as the best performer, followed by BFSI and retail.
Source: Company reports

Attrition rates worsened for the company, surging to 21.5% in Q2 from 19.7% in the previous quarter. Overall, the company’s headcount stood at 6,16,171, with a net addition of 9,480 employees in the September quarter.

The company hired 20,000 freshers in Q2, an increase of 33% over the previous quarter. Overall, its H1 FY23 fresher hires came in at 35,000, down from 43,000 in H1 FY22.

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