TCS Q2 Results: IT major Tata Consultancy Services (TCS) on Thursday announced its fiscal second quarter earnings with profit at Rs 11,909 crore, up 5.0 per cent in comparison to Rs 11,342 crore during the corresponding quarter of previous financial year. It posted revenue from operations at Rs 64,259 crore, up 7.7 per cent as against Rs 59,692 crore during the second quarter of FY24.
Further, the company also announced that it has canceled its post earnings press conference and interviews, following the demise of Ratan Tata yesterday. “We hereby inform you that the press conference for Q2FY2025 scheduled to be held at 5:30 PM (IST) on Thursday, October 10, 2024, stands cancelled. The other events would be held as per schedule,” it said in an exchange filing.
Ratan Tata, the chairman of Tata Sons and recipient of India’s second highest civilian honour, Padma Vibhushan, passed away on Wednesday at Mumbai’s Breach Candy Hospital. Ratan Tata, 86, was in a critical condition and was under intensive care.
Indian Renewable Energy Development Agency Ltd (IREDA) on Thursday announced its fiscal second quarter earnings with profit at Rs 387.75 crore, up 36.2 per cent in comparison to Rs 284.73 crore during the corresponding quarter of previous fiscal year. It posted revenue from operations at Rs 1629.55 crore, up 38.5 per cent as against Rs 1176.63 crore during the second quarter of FY24. NII, meanwhile, went up by 52 per cent at Rs 546.8 crore as against Rs 359.8 crore YoY.
As on 30th September 2024, the company had applied for 8,354 patents, including 160 applied during the quarter and been granted 4,369 patents including 223 granted during the quarter.
Samir Seksaria, Chief Financial Officer, said, “We made strategic investments this quarter in talent and infrastructure to ensure sustainable growth. Our disciplined execution resulted in superior cash conversion. Our longer-term cost structures remain unchanged, and we remain confident in our ability to continue delivering industry leading profitable growth.”
TCS announced that its workforce stood at 612,724 as on September 30th. “The employee base is very diverse, with 35.5% women and with 150 nationalities. TCSers have clocked 26.1 million learning hours and acquired 2.6 million competencies YTD. IT services’ attrition was at 12.3% for the last twelve months,” it said.
Milind Lakkad, Chief HR Officer, said, “We welcomed 11,000 associates in the first half of the year, and we remain on track for trainee onboarding as planned. We have also commenced the campus hiring process for FY26. Our strong talent base and increased learning intensity prepares us well for the complex technology transformations that customers entrust us with.”
K Krithivasan, Chief Executive Officer and Managing Director, said, “We saw the cautious trends of the last few quarters continue to play out in this quarter as well. Amidst an uncertain geopolitical situation, our biggest vertical, BFSI showed signs of recovery. We also saw a strong performance in our Growth Markets. We stay focused on sharpening our value proposition to our clients, employees and other stakeholders.”
• Revenue at Rs 64,259 crore; up 7.6% YoY and up 5.5% YoY in Constant Currency
• Operating Margin at 24.1%; down 0.2% YoY
• Net Income at Rs 11,909 crore; up 5.0% YoY
• Net Margin at 18.5%
• Net Cash from Operations at Rs 11,932 crore
• Workforce strength: 612,724; Net Headcount addition of 5,726
• Diverse and inclusive workplace: Women in the workforce: 35.5%; 150 Nationalities
• LTM IT Services attrition rate at 12.3%
In a regulatory filing, TCS announced that the press conference for Q2FY25 has been cancelled and the other events would be held as per schedule. “We hereby inform you that the press conference for Q2FY2025 scheduled to be held at 5:30 PM (IST) on Thursday, October 10, 2024, stands cancelled. The other events would be held as per schedule,” it said.
TCS board also declared a second interim dividend of Rs 10 per equity share of Re 1 each of the company. “The second interim dividend shall be paid on Tuesday, November 5, 2024, to the equity shareholders of the company, whose names appear on the Register of Members of the Company or in the records of the Depositories as beneficial owners of the shares as on Friday, October 18, 2024, which is the Record Date fixed for the purpose,” it said in a regulatory filing.
IT major TCS on Thursday released its fiscal second quarter earnings with profit at Rs 11,909 crore, recording a growth of 5.0 per cent in comparison to Rs 11,342 crore during the corresponding quarter of previous financial year, missing estimates. It posted revenue from operations at Rs 64,259 crore, up 7.7 per cent as against Rs 59,692 crore during the second quarter of FY24. The company EBITDA stood at Rs 15,465 crore.
According to a CNBC TV18 poll, TCS was expected to record Q2FY25 profit at Rs 12,422 crore. The company revenue was estimated at Rs 64,160 crore.
Earlier in September, TCS had announced that it has launched a new delivery centre in Warsaw, Poland, expanding its operations in the country. In a regulatory filing, TCS had said that Poland is home to one of the largest European technology talent pools and the centre will tap into the growing Polish Information and Communication Technology (ICT) talent pool. “It forms a part of TCS’ European delivery network, which facilitates the delivery of hyper-connected services to its customers across Europe. This ensures that all TCS customers globally benefit from consistent, nearshore experiences tailored to their unique cultural, compliance, language, and technological requirements,” it had said.
TCS is expected to post a steady rise in its revenues during the July-September quarter on the back of ramp-up of BSNL’s 4G project. However, analysts continue to remain doubtful of any meaningful recovery in growth in the US and the UK markets.
An analysis report by Nomura said, “Q2FY25F to be a mixed bag for companies. We expect growth divergence to remain significant amongst the Indian IT services companies under our coverage. In large caps, we expect Infosys to have the strongest growth in revenue at 3.3% q-q in constant currency or cc terms (+2.5% q-q organically), and Wipro to have the weakest performance at 0% q-q growth. In mid caps, we expect Persistent and Coforge to have the strongest revenue growth at +3.6% and +3.5% q-q, respectively, and weakest performance from Mphasis at +1.9% q-q. In small caps, we expect eClerx to have the strongest revenue growth at +4% q-q and Birlasoft to have the weakest growth at +2% q-q, in cc terms.”
InCred Equities said, “TCS’ Q1FY25 order bookings at $8.3 billion were down 37.1%/18.6% qoq/yoy driven by weakness in FSI (TCV down 34.1%/10%), consumer (down 31.3%/8.3%) & North America (down 19.3%/11.5%). However, we believe, Q1 may not be a representation of FY25F. Further, Q1 commentary was relatively better led by the improving prospects across markets & verticals, healthy deal pipeline & rising GenAI momentum (deal pipeline at $1.5 billion doubled qoq). However, what is of interest to us is an update to TCS’ Q1FY25 earnings commentary of the “average tenure of pipeline slowly inching less” as it could improve near-term growth acceleration.”
Per a report by JM Financial, TCS is expected to report cc revenue growth of 0.9 per cent with 80bps cross currency tailwind translating into 1.6 per cent QoQ USD revenue growth. “We estimate $75 million incremental contribution from BSNL deal; ex regional markets (where BSNL is housed), we expect 0.7 per cent USD revenue growth for TCS (flat in cc). Softer growth in developed markets and lower margin profile of BSNL will be key margin headwinds, resulting in flat margin,” it said.
Estimates for Q2FY25:
Revenue: Rs 63.92 thousand crore; up 7/1% YoY
Net profit: Rs 12.31 thousand crore; up 8.5% YoY
EBIT: Rs 15.81 thousand crore; up 9.2% YoY
According to a CNBC TV18 poll, TCS is expected to record Q2FY25 profit at Rs 12,422 crore as against Rs 12,040 crore posted during the previous quarter. The revenue from operations is estimated at Rs 64,160 crore and EBIT is projected at Rs 15,950 crore. The poll also maintained that CC revenue growth by TCS is seen at 1.2 per cent and the BSNL deal is likely to add to the topline.
GM Breweries on Thursday announced its fiscal second quarter earnings with profit at Rs 21.67 crore, down 3.1 per cent in comparison to Rs 22.37 crore during the corresponding quarter of FY24. It recorded revenue from operations at Rs 595.78 crore, marginally higher than Rs 594.47 crore during the second quarter of previous fiscal year. The company EBITDA stood at Rs 27.1 crore.
Dr Azad Moopen, Founder and Chairman, Aster DM Healthcare, said, “I am deeply saddened to hear of Sir Ratan Tata’s passing. He not just leaves behind a legacy of business acumen but of a man who showed the world that compassion and social responsibility can co-exist with corporate success. His leadership has shaped industries and touched countless lives, driven by a quiet commitment to ethical principles and long-term societal value.
Mr. Tata’s understanding of healthcare transcended traditional corporate philanthropy. He recognized early on that access to quality healthcare is fundamental to the development of any nation. In a sector where the challenges are as complex as they are urgent, Ratan Tata demonstrated that businesses could act as drivers of systemic improvement. His belief that healthcare must be both accessible and sustainable is a guiding principle for many today.
His support for initiatives such as cancer research, rural healthcare programs, and the establishment of advanced medical facilities has addressed critical gaps, creating lasting benefits for underserved communities. His vision extended beyond infrastructure to a holistic approach that includes patient care, education, and medical research.
His leadership continues to serve as a model for future generations, illustrating that progress is achieved when success is measured not just in profits, but in the lasting difference it makes in people’s lives.”
Vishal Kampani, Vice Chairman & Managing Director, JM Financial Limited, expresses his deepest condolences on the demise of Ratan Tata. “With deep sadness, we bid farewell to Ratan Tata, a visionary leader whose immense contributions to the nation and the global business community are beyond comparison. He was not only a towering figure in the corporate world but also a true humanitarian, whose commitment to social responsibility will inspire generations to come. My heartfelt thoughts and prayers are with his loved ones and the entire Tata Group during this time of profound loss. His absence will be deeply felt, but his legacy will remain forever.”
Today, TCS is expected to announce its second dividend for the financial year 2024-25. The company had earlier paid the first interim dividend for FY25 of Rs 10 per share, the record date for which was July 19.
In FY24, TCS had distributed a total dividend payout of Rs 46,223 crore to its shareholders. It had announced a final dividend in April 2024 of Rs 28 per share for the fiscal year, which was in addition to an interim dividend of Rs 9 per share and a special dividend of Rs 18 per share issued earlier in the year. TCS had also declared interim dividends of Rs 9 per share in both the first and second quarters.
The IT company had conducted a share buyback program worth Rs 17,000 crore during FY24.
In FY23, TCS paid a total of Rs 115 per share dividend, worth Rs 33,306 crore.
TCS board is expected to consider declaration of a second interim dividend to the equity shareholders today. The company has fixed October 18 as the record date for the dividend. In a regulatory filing on September 30, TCS had said, “The second interim dividend, if declared, shall be paid to the equity shareholders of the Company whose names appear on the Register of Members of the Company or in the records of the Depositories as beneficial owners of the shares as on Friday, October 18, 2024, which is the Record Date fixed for the purpose.”
Motilal Oswal Financial Services said that TCS is expected to report YoY revenue growth of 5.9 per cent in FY25. “Mid-tier companies should continue to do well though, especially companies with strong offerings in data engineering and ERP modernization and we expect their growth outperformance to be sustained over the medium term,” it added.
While the margins for the sector, the report said, are likely to be largely range-boundin Q2, MOFSL expects margin decline for TCS with continued large deal ramp-up, which should be partly offset by the absence of visa costs and cost optimization benefits.
EBIT margin for TCS is expected to slightly decline by 20 bp QoQ, largely due to the BSNL deal ramp-up and investments made in talent development and training.
An analysis report by Emkay Global said, “We build in a 2.2% QoQ USD revenue growth after factoring in 100bps cross currency tailwinds. We are building an incremental 0.8% QoQ contribution from the BSNL deal. EBIT margin is likely to remain flattish QoQ due to adverse revenue mix with BSNL driving bulk of incremental revenue and muted growth in international market.”
Emkay Global listed out the key things to watch out for:
i) Anticipated impact of furloughs in Q3 and possibility of growth uptick and discretionary spending recovery in H2; ii) demand trends in key verticals like BFSI, Retail, Hi Tech, Manufacturing, and Communications; iii) deal intake and deal pipeline (including AI and Gen AI); iv) pricing environment considering macro uncertainties and deal mix shift toward cost takeouts; v) margin outlook; vi) Management commentary on demand environment across geographies; and vii) hiring plan including freshers.
Estimates for Q2FY25:
Net sales: Rs 64.28 thousand crore; up 7.7% YoY
PAT: Rs 12.46 thousand crore, up 9.9% YoY
EBITDA: Rs 17.16 thousand crore; up 9.0% YoY
During the first quarter of FY25, TCS had reported an increase in hiring during Q1 after three straight quarters of decline. The company witnessed a headcount increase by 5,452 sequentially, ending the period with a total headcount of 606,998.
The IT major had ended sequential dip of 1,759 during the March quarter and had ended FY24 with 13,249 fewer employees compared to FY23.
The attrition rate at TCS during Q1 eased further to 12.1 per cent from 12.5 per cent in the March quarter.
Earlier in July, TCS had reported a decent growth during its first quarter of the ongoing financial year. It had recorded net profit at Rs 12,040 crore, up 8.72 per cent in comparison to Rs 11,074 crore during the same quarter last year. It had reported revenue from operations at Rs Rs 62,613 crore, which went up by 2.24 per cent from Rs 61,237 crore in the corresponding quarter last year. Operating margin for the quarter was at 24.7 per cent. Net income for Q1FY25 was posted at Rs 12,040 crore, up 8.7 per cent YoY.
According to media reports, TCS will not hold press conference and interviews post the announcement of Q2 results today. This is following the demise of Ratan Tata on Wednesday. The company, however, has not communicated anything in this regard. The leadership team was to hold the press conference at 5:30 pm.
Greetings! With Tata Consultancy Services (TCS) all set to announce its fiscal second quarter earnings today, we, at FinancialExpress.com, will bring all the updates on the quarter performance by the company, deal wins, dividend announcements, management commentary of way forward, among other announcements, through this blog. Stay tuned.