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TCS Reports Double Digit Growth in Fiscal Q2

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10/12/2018
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MUMBAI -- Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading IT services, consulting and business solutions firm reported its consolidated financial results according to Ind AS and IFRS for the period ending September 30, 2018.

Financial Highlights for Quarter Ended September 30, 2018

  • Revenue at $5.215 Bn, +10 % YoY
  • Net Income at $1.119 Bn, +11.9% YoY
  • Operating Margin at 26.5%, an expansion of 1.4% YoY
  • Earnings Per Share at $0.29, +11.9% YoY
  • Net Cash from Operations at $1.042 Bn i.e. 93.2% of Net Income
  • Dividend per share of ` 4.00 Record date 24/10/18; Payment date 30/10/18

    Business Highlights for Quarter Ended September 30, 2018

  • BFSI, Retail verticals continue to accelerate: +6.1% and +15.6% YoY respectively
  • UK and Europe lead growth: +22.8% YoY and +17.4% YoY respectively
  • Superior client additions across bands: 4 new clients in the $100M+ band, 7 in the $20M+ band, 10 in the $10M+ band, 11 in the $1M+ band
  • World’s largest Agile-ready workforce: 279,000+ employees Agile trained
  • Net addition of 10,227 in Q2: highest in 12 quarters
  • Best-in-class retention: IT Services attrition rate steady at 10.9% LTM

    Commenting on the Q2 performance, Rajesh Gopinathan, CEO and MD, said: “We are very pleased with our all-round strong performance in Q2. Revenue growth was driven by expanding demand for digital transformation across verticals, and continued acceleration in BFSI and Retail. Our industry-leading digital growth, and best-in-class client metrics bear testimony to our standing as the preferred partner in our customers’ growth and transformation initiatives.”

    He added: “Our Business 4.0 thought leadership framework, contextual knowledge, and full stakeholder capabilities differentiate us, and drive demand for our solutions and services. Our Machine First Delivery Model (MFDM™) and Location-independent Agile methods are helping customers integrate automation deep within their enterprise, and orchestrate a more effective human-machine interplay to deliver superior customer experience at scale.”

    N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: “This has been a very good quarter, with strong demand in areas like analytics, cloud and automation. Our Quartz Blockchain Solution is gaining traction, and we are seeing the creation of nascent ecosystems which could transform markets. Our Enterprise Agile 2020 vision is shaping open, collaborative workplaces and Agile ways of working. This, along with MFDM, is driving intelligent automation and the discovery of a new meaning to work ie training the machines with the contextual knowledge, scaling businesses and creating ecosystems. This people-first approach to the machine-first world is seen as a key differentiator by our clients in driving growth, competitive edge and innovation in their businesses”

    V Ramakrishnan, Chief Financial Officer, said: “It is encouraging to be back in our preferred range of profitability at the operating level. Even as we expand our investments to build on our lead in the Digital space, our disciplined operations, the improving growth trajectory and a supportive currency make our margins resilient.”

    Q2 Segment Highlights
    Industries: Revenue growth accelerated in BFSI (+6.1% vs +4.1% in Q1) and Retail & CPG (+15.6% vs +12.8% in Q1) in Q2. Other verticals to show strong growth were: Energy & Utilities (+22.2%), and Life Sciences & Healthcare (+14.7%).

    Markets: Growth was led by UK (+22.8%), Europe (+17.4%), and Asia Pacific (+12.5%). Revenue growth in North America accelerated further to 8.1%, versus 7% growth in Q1. India grew 7.4%.

    Services: Business & Technology Services saw strong and broad-based revenue growth across service practices. Investments in new services and offerings, assets, thought leadership and innovation have started showing results in terms of deal wins and pipeline build-up, as well as through client and analyst endorsements and thought leadership publications.

  • Consulting & Services Integration: The full-stakeholder strategy is playing out nicely and helping win and deliver end-to-end transformation initiatives for business stakeholders. Strategic offerings which address priorities of board-level significance, such as Enterprise Agility, M&A and Finance Transformations, saw excellent traction in Q2.

  • Digital Transformation Services: TCS’ Business 4.0 thought leadership framework to guide and shape the re-imagination of businesses for growth and transformation continues to resonate strongly with customers. Cloud Services, Analytics, IoT, TCS Interactive, Cyber Security and Enterprise Intelligent Automation, all experienced strong growth during the quarter. Newer service lines – Blockchain, Digital Workplace and Quality Engineering & Transformation – are seeing strong pipeline build-up.

  • Cognitive Business Operations: CBO saw solid growth on a large base and the holistic, outcome-based approach continues to see strong traction in the market as customers seek to leverage TCS digital innovations such as MFDM for enhancing their customer experience and other priorities.

    Tata Consultancy Services Ltd.

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