TCS Q2 earnings up 8.4% sequentially to Rs 64.46 bn

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The firm said it saw attrition reduce to 11.3 per cent, as it focused on training its resources in emerging technologies and digital, which has helped it grow its business in the newer domains.

Tata Consultancy Services (TCS) on Thursday reported a net profit of Rs 6,446 crore for the three months to September, an increase of 8.4% quarter-on quarter, beating analysts' estimates on the back of volume expansion, growth in revenues and improved profitability.

TCS has declared a whopping 700 per cent second interim dividend of Rs 7 per share of Re 1 face value.

Tata Consultancy Services, India's largest software exporter, posted a better-than-expected second-quarter net income as a surge in investments in new digital technologies fueled growth in revenues. However, when compared to the same period previous year, its net profit dropped 2.1 per cent from Rs 6,603 crore.

Commenting on Q2 earnings, CEO and managing director Rajesh Gopinathan said: "We experienced robust volume growth in Q2, driven by good demand across multiple industry verticals".

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Shares of TCS gained 1.9% in Mumbai trading on Thursday before the earnings were released, while the benchmark S&P BSE Sensex closed up 1.1%.

He added that the company continues to gain share in the fast growing "digital spend" of its customers.

According to TCS, strong revenue growth was visible across verticals in the September quarter.

With the exception of retail and communication & Media industries (CMI), all industry verticals grew above the company average led by travel & hospitality (up 8 per cent QoQ), energy & utilities (up 7.2 per cent) and life sciences and health care (up 3.6 per cent). Our client-centricity and business depth are resulting in industry-leading customer satisfaction levels and strong client metrics. "The digital growth is at par with the industry", said Apurva Prasad, IT analyst, HDFC Securities.TCS said it was taking away contracts from competition, as deal renewals increase for the first time in six quarters.Contract trends were steady in the September quarter with 16.1 per cent year-on-year growth in global ACV (annual contract value), which was the highest in the past six quarters, said Prasad of HDFC Securities, analysing data from Gartner and ISG. "With the sectoral headwinds slowly abating, we expect steadier and stronger growth ahead".

V. Ramakrishnan, Chief Financial Officer, said: "rigour and discipline in our operations helped accomplish an impressive margin performance and progress along the profitability path we had outlined earlier". North America, which accounts for 54% of the revenue, grew barely 1.4% sequentially, weighed by the slowdown in financial services and retail spending. Our investment program remains geared for growth.

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