IT bellwether Tata Consultancy Services (TCS) on Wednesday released its first-quarter earnings for the financial year 2023-24, which saw its top and bottom line growing by double-digit on a year-on-year (YoY) basis. The earnings were in line with Street expectations amid persistent macro uncertainties as well as a soft demand outlook with limited large deal ramp-ups. The board of TCS has also declared the first interim dividend of ₹9 per equity share for the current fiscal, the company said in a release.

The country’s most valued IT firm has reported a 16.8% growth in consolidated net profit at ₹11,074 crore in the April-June quarter of the current fiscal compared with ₹9,478 crore in the same period last year. Sequentially, the consolidated profit dropped by 2.8% from ₹11,392 crore in the March 2023 quarter.

The revenue from operations rose 12.6% to ₹59,381 crore from ₹52,758 crore in the corresponding quarter last fiscal. On quarter-on-quarter (QoQ), the revenue fell marginally by 0.37% from ₹59,162 crore in Q4FY23.

In dollar terms, the revenue climbed 4% to $7,226 million as against the previous quarter.

“It is very satisfying to start the new fiscal year with a string of marquee deal wins. We remain confident in the longer-term demand for our services, driven by the emergence of newer technologies. We are investing early in building capabilities at scale on these new technologies, and in research and innovation, so we can maximize our participation in these opportunities,” says K Krithivasan, chief executive officer and managing director, TCS.

Industry-wise, the revenue growth was led by the life sciences and healthcare division, which grew 10.1%, followed by the manufacturing vertical by 9.4%. The banking, financial services, and insurance (BFSI) posted 3% growth, retail and CPG grew by 5.3%, technology & services by 4.4%, and communications & media by 0.5%.

Geography-wise, among major markets, the United Kingdom topped the chart with 16.1% growth; followed by North America (4.6%) and Continental Europe (3.4%). In emerging markets, Middle East & Africa was the best performer with 15.2% growth, followed by India (14%), Latin America (13.5%), and Asia Pacific (4.7%).

As of June 30, 2023, TCS’ workforce stood at 615,318, with a net addition of 523 during the quarter. The company has also rolled out its annual salary increase across its workforce, with effect from April 1, 2023. 

Samir Seksaria, Chief Financial Officer, says, “We have gone ahead and rolled out our annual salary increase with effect from April 1. Our operating margin of 23.2% reflects the 200-bps impact of this hike, offset through improved efficiencies. At the same time, we continue to make the investments needed to power our future growth, including expansion of our delivery and research infrastructure.”

The IT giant says that the attrition rate for the quarter ending June 2023, dipped further to 17.8% for the last twelve months.

The board of the IT major has declared the first interim dividend of ₹9 per equity share of ₹1 each for FY24, which will be paid to the equity shareholders of the company on August 7, 2023. It has fixed July 20, 2023, as the record date for the purpose. In the last fiscal, TCS declared an equity dividend amounting to ₹115 per share.

Ahead of Q4 results, TCS shares ended 0.36% lower at ₹3,260.20 on the BSE. 

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