TCS Q2 Results: Net profit rises 8.7% on year to ₹11,342 crore; declares dividend
TCS Q2 earnings: TCS Q2 net profit rises 8.7% to ₹11,342 crore. TCS board approves ₹17,000 crore buyback at ₹4,150/share.
TCS Q2 earnings: Information Technology (IT) services major, Tata Consultancy Services (TCS) Ltd on Wednesday reported an 8.7% year-on-year rise in its consolidated net profit (attributable to shareholders of the company) for the fiscal's second quarter ended September (Q2FY24) to ₹11,342 crore. The company had reported a profit of ₹10,431 crore in the year-ago period. Sequentially, the consolidated net profit was up 2.4%. TCS shares ended at ₹3,610.20 apiece, down 0.52% on BSE.
The IT company's consolidated revenue from operations stood at ₹59,692 crores during the quarter ended September from ₹55,309 crore in Q2FY23, a year-on-year jump of nearly 8%. Sequentially, the growth was muted, up by 0.5% from ₹59,381 crore in Q1FY24.
The company's consolidated total income for the quarter ended September surged by nearly 8% year-on-year to ₹60,698 crore.
According to the exchange filing, operating margin, or EBIT, for the quarter ending in September was 24.3%, an increase of 0.3% year over year.
“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%. We will continue to push the growth, efficiency and innovation levers to further improve our profitability. In keeping with our shareholder friendly capital allocation policy, the Board has recommended a share buyback to the tune of ₹17,000 crore at ₹4,150 per share,” said Samir Seksaria, Chief Financial Officer of TCS.
With $11.2 billion worth order wins for the second quarter of FY24, TCS's order book improved quarter-on-quarter (QoQ).
“Strong deal momentum delivered us a very large order book in Q2 – our second highest TCV ever in a quarter, and good pipeline,” said K Krithivasan, Chief Executive Officer and Managing Director of TCS.
In constant currency (CC) terms, TCS' Q2 revenue grew 2.8% YoY.
According to the company's exchange, the verticals with the highest growth rates were manufacturing (5.8%), life sciences and healthcare (5%), and energy, resources, and utilities (14.8%). On the other side, BFSI was -0.5%, Communications & Media was -2.1%, Consumer Business Group (CBG) by rose by 1%, and Technology & Services was at -2.2%.
The United States rose by 10.7%, the United Kingdom by 1.3%, and North America by 0.1% among the major markets. India increased 3.9%, Asia Pacific expanded 4.1%, Latin America gained 13.1%, and the Middle East and Africa grew 15.9% in emerging markets, according to company's filing.
TCS Dividend
The board of directors have declared second interim dividend of ₹9 per equity share of ₹1 each of the company.
TCS Buyback
The company has approved share buyback up to ₹17,000 crore at ₹4,150 per share.
“The board of directors of the company at its meeting held today has approved a proposal to buyback up to 4,09,63,855 equity shares of the Company for an aggregate amount not exceeding ₹17,000 crore, representing (1.12)% of the total paid-up equity share capital, at ₹4,150 per equity share,” the company said in an exchange filing.
TCS Management
The company appointed S. Sukanya as the Senior Vice President and Chief Information Officer.
Further, the company announced that Al-Noor Ramji, Hanne Birgitte Breinbjerg Sorensen, and Keki Mistry, the former vice chairman and CEO of HDFC, will become non-executive independent directors on the board.
The comapny has reappointed Hanne Birgitte Breinbjerg Sorensen and Keki Minoo Mistry as Non-Executive Independent Director, for a second consecutive term of 5 years from December 18, 2023 up to December 17, 2028.
The IT major has appointed Al-Noor Ramji as an Additional and Non-Executive Independent Director for a term of 5 years, effective October 12, 2023, as per the filing.
" On behalf of the Board, I thank Don for his enormous contribution and guidance during his tenure on the Board of TCS. The Company, Board and the Management have immensely benefited from his profound knowledge of the industry, of evolving technology landscape and impact of technology on businesses. We are grateful for his contribution to the Board, Audit and Risk Management Committees of the Board," said N Chandrasekaran, Chairman, Board of Directors of TCS.
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