TCS Q1 results: Profit rises 9% YoY to ₹12,040 crore; declares dividend of ₹10

Tata Consultancy Services (TCS), the country’s largest software exporter, has kicked-off June quarter earnings season on positive note, posting 8.7% year-on-year (YoY) growth in its net profit, which is in line with Street expectations. The board of the country’s most valued IT company also declared an interim dividend of ₹10 per equity share of ₹1 each of the company.

TCS has reported consolidated net profit of ₹12,040 crore in April-June quarter of the current fiscal (Q1 FY25) compared to ₹11,074 crore in the same period last year, as per the earnings report released by TCS today. Sequentially, profit was down 3.2% from ₹12,434 crore in March quarter of FY24, due to the impact of the annual wage increments during Q1 FY25.

The revenue from operations rose 5.4% YoY to ₹62,613 crore as against ₹59,381 crore in the year ago period. On quarter-on-quarter (QoQ), the revenue dropped 2.2% from ₹61,237 crore in Q4 FY24.

In dollar terms, net income was at $1.44 billion, while revenue stood at $7.51 billion, up 4.4% YoY in constant currency terms.

The consolidated operating margin for the quarter stood at 24.7%, up 1.5% YoY, while the net margin was at 19.2%.

K Krithivasan, Chief Executive Officer and Managing Director, says, “I am pleased to report a strong start to the new fiscal year with all-round growth across industries and markets. We are continuing to expand our client relationships, create new capabilities in emerging technologies and invest in innovation, including a new AI-focused TCS PacePort in France, IoT lab in the U.S. and expanding our delivery centers in Latin America, Canada and Europe.”

During the quarter under review, TCS reported total contract value of $8.3 billion, which was down 18.6% YoY and 37.1% sequentially. In Q4 FY24, TCS order book stood at $13.2 billion.

As per the company, all major markets reported sequential growth, with emerging market reporting double digit rise, led by India business, which grew 61.8% YoY. Segment wise, all verticals posted broad-based growth, led by manufacturing (9.4%), energy, resources & utilities (5.7%), and life sciences & healthcare (4%).

Samir Seksaria, Chief Financial Officer, says, “In spite of the usual impact of the annual wage increments in this quarter, we have delivered strong operating margin performance, validating our efforts towards operational excellence. We remain focused on making the right investments in R&I and talent, strengthening our superior return ratios and creating long term value for our stakeholders.”

As of June 30, 2024, TCS’ workforce stood at 606,998, including 35.5% women, with net headcount addition of 5,452 during the quarter. The IT services’ attrition was at 12.1% for the last twelve months. 

“I am delighted to announce the successful completion of our annual increment process. Our continued focus on employee engagement and development led to industry-leading retention and strong business performance, with the net headcount addition being a matter of immense satisfaction,” says Milind Lakkad, Chief HR Officer.

As per the company, the interim dividend will be paid on August 5, 2024, to the eligible equity shareholders of the company.

Ahead of Q1 results, TCS shares ended 0.33% higher at ₹3,922.70, with a market capitalisation of ₹14.19 lakh crore.