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TCS Q2 results: Revenue in line with estimates, margin stable but attrition jumps

Tata Consultancy Services Ltd.’s revenue rose for the fifth straight quarter on order wins as clients continued to spend on digital services.

Revenue of India’s largest software services provider rose 3.2% over the preceding quarter to Rs 46,867 crore in the three months ended September, according to its exchange filing. That compares with the Rs 47,331.8-crore consensus estimate of analysts tracked by Bloomberg. Revenue in dollar terms stood at $6,333 million.

Revenue in constant currency terms rose 4% sequentially across markets. The company stuck to its double-digit growth guidance for the ongoing fiscal.

Net profit rose 6.84% to Rs 9624 crore compared with the forecast of Rs 9,627.5 crore.

Operating profit rose 3.56% to Rs 12000 crore.

TCS won new deals worth $7.6 billion, taking the total deals to $15.7 billion in the first half of the year. The company bagged deals worth $31 billion in FY21.
During the quarter, the company added four $100-million clients, taking the total count of such customers to 54.

Attrition inched up to 11.9% compared with 8.3% in the first quarter.

“The strong and sustained demand environment is a once-in-a-decade opportunity to position ourselves as the preferred growth and transformation partner for our customers,” Rajesh Gopinathan, managing director and chief executive officer at TCS, said.

“We’re using the growth tailwind to invest in strengthening relevant capabilities and building out a comprehensive portfolio of offerings that caters to a broader set of stakeholders in the enterprise across business cycles, strengthening our brand, and making our business more resilient. We believe this is the most sustainable pathway to create longer term value for all our stakeholders.”

TCS’ operating margin remained stable at 25.6% from 25.5% in the preceding quarter.

The BFSI and manufacturing segments continued to drive TCS’ growth even as growth returned to retail and consumer as well as communication and media segments.

TCS’s mainstay BFSI and Manufacturing verticals delivered growth.

Shares of TCS rose 1.10% on Friday compared with the benchmark BSE Sensex’s 0.64% increase. Bloomberg

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