Home / Companies / News /  TCS Q2 results: Net profit drops 7% to 7,475 crore, revenue at 40,135 cr

Tata Consultancy Service (TCS), India's biggest software services exporters, on Wednesday reported a 7.05% drop in its net profit to 7,475 crore for the quarter ended September 2020 against 8,042 crore in the same quarter last year. TCS declared an interim dividend of 12 per equity share of 1 each of the company.

The net income of the company increased by 4.9% (year-on-year) to 8,433 crore. The revenue in constant currency terms witnessed a drop of 3.2% cent on year-on-year basis. Consolidated revenue from operations for the quarter stood at 40,135 crore, up by 3% on a year-on-year basis.

India's biggest IT company reported a nearly 14% year-on-year fall in net profit at 7,008 crore for the June quarter. The company had also declared an interim dividend of 5 per equity share.

Commenting on TCS' Q2 performance, Rajesh Gopinathan, chief executive officer and managing director, said, "Driving accelerated business value realization of our customers' digital investments has resulted in broad-based revenue growth. The strong order book, a very robust deal pipeline, and continued market share gains give us confidence for the future."

He added, "What we are witnessing right now is the start of the first phase of a multi-year technology transformation cycle. In the current phase, enterprises are building a cloud-based foundation that will serve as a resilient, secure and scalable digital core. In subsequent phases, we will see the native capabilities of these platforms being utilized to create innovative new business models and differentiated customer experiences."

"Our investments in building deep expertise on these platforms, in research and innovation and in industry-specific solutions leveraging our contextual knowledge, position us very strongly to benefit fully from this secular demand driver," Gopinathan mentioned.

TCS also announced a share buyback proposal of 16,000 crore. The company said, "The board has approved a proposal to buy back up to 5,33,33,333 equity shares, being 1.42 percent of the total paid-up equity share capital, at 3,000 per equity share for an aggregate amount not exceeding 16,000 crore (excluding taxes and related expenses), on a proportionate basis under the tender offer route using the stock exchange mechanism, subject to the approval of the members by means of a special resolution through a postal ballot.

N Ganapathy Subramaniam, chief operating officer & executive director, said, "Our a/I-round performance this quarter is a huge endorsement of the increased relevance of our services and solutions to our clients as they pivot from risk mitigation to long-term resilience powered by cloud, digital and simplification of working methods."

Earlier this week, TCS became the second Indian firm after Reliance Industries to attain a market valuation of more than 10 lakh crore helped by a rally in its share price.

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