New Delhi: The largest IT company by revenue, Tata Consultancy Services, announced on Wednesday that its net profit for the September quarter increased by 8.74 percent year over year to Rs 11,342 crore from Rs 10,431 crore in the same period the previous year. Brokerage predictions indicated that the IT giant would post a 9–11% YoY increase in net profit for the September quarter, based on a roughly 9% increase in sales.
Although TCS’s second-quarter earnings exceeded analysts’ expectations, the company’s growth was just marginal, with both profit and sales growing by single digits.
The expansion in Q2 was attributed by K Krithivasan, Chief Executive Officer and Managing Director, to strong transaction momentum.
Additionally, the TCS board approved a tender offer for a share repurchase of up to Rs 17,000 crore at Rs 4150 per share. The company plans to repurchase equity shares valued at Rs 4,09,63,855, at 1.12% of the total amount of paid-up equity share capital.
A second interim dividend of Rs 9 per share of Rs 1 each was also issued by the Board. October 19, 2023, is the record date, and November 07, 2023, is the payout date for the interim dividend.
Compared to the same quarter last year, when revenue was Rs 55,309 crore, the September quarter’s revenue of Rs 59,692 crore represented an 8% YoY increase.
“Our clients continue to entrust us with critical new technology initiatives and large programmes to transform their IT and business operating models digitally,” stated K Krithivasan, Chief Executive Officer and Managing Director of TCS. We had a very substantial order book in Q2, our second-highest TCV in a quarter, and a strong pipeline thanks to strong deal momentum. We are optimistic about our longer-term development prospects because of the tenacity of the demand for our services, our clients’ commitment to long-term programmes, and their ongoing curiosity in experimenting with Gen AI and other new technologies.”
“Our focus on improving employee utilisation while driving productivity improvement and cost efficiency across the organisation has helped us expand our operating margin to 24.3%,” Chief Financial Officer Samir Seksaria stated. We’ll keep applying pressure to the growth, efficiency, and innovation levers in order to increase our profitability even further. As per our capital allocation policy that prioritises the interests of shareholders, the Board has suggested repurchasing shares worth Rs 17,000 crore, with a price tag of Rs 4,150 per share.”
Today, the profits were disclosed after market hours. TCS shares closed 0.52% down at Rs 3610.20 on the BSE as compared to the previous closing of Rs 3629.20. The company’s market capitalization was Rs 13.20 lakh billion.
