TCS Q1 profit rises 9% to Rs 12,040 crore, revenue beats estimates

TCS Q1 earnings: Tata Consultancy Services, the country's largest information technology (IT) services company, on Thursday reported net profit of Rs 12,040 crore in the first quarter of current financial year, marking an annual increase of 9 per cent from Rs 11,074 crore in the same period last year. The growth in June quarter was driven AI, Cloud, Cyber Security and Enterprise Solutions, the company said.

However, on a sequential basis, the IT giant's net profit declined 3.16 per cent from Rs 12,434 crore.

The company's consolidated revenue rose 5.4 per cent to Rs 62,613 crore in the June quarter. Analysts, on average, expected revenue at Rs 62,207 crore, as per LSEG data.

The Mumbai-based company's operating profit improved by 150 basis points to 24.7 per cent.

The company added 5,452 employees taking its total strength to 6,06,998 employees and its attrition further came down to 12 per cent.

“I am pleased to report a strong start to the new fiscal year with all-round growth across industries and markets. We are continuing to expand our client relationships, create new capabilities in emerging technologies and invest in innovation, including a new AI-focused TCS PacePort™ in France, IoT lab in the US and expanding our delivery centers in Latin America, Canada and Europe,” said K Krithivasan, Chief Executive Officer and Managing Director.

Clients prioritized initiatives that are making their products and services smarter, uplifting productivity while transcending the next Gen technology levers like GenAI, IoT and others. Win themes across key deals involved operating model transformation, vendor consolidation, legacy modernisation, M&A, customer experience, digital workplace services, ER&D, Identity & access management and AI/GenAI initiatives, the company said in a press release.

Samir Seksaria, Chief Financial Officer, said, “In spite of the usual impact of the annual wage increments in this quarter, we have delivered strong operating margin performance, validating our efforts towards operational excellence. We remain focused on making the right investments in R&I and talent, strengthening our superior return ratios and creating long term value for our stakeholders.”

“We launched new labs, Centres of Excellence and Delivery Centres focused on AI, IoT (Internet of Things) and Digital Engineering. We have also further expanded our partnership and alliances ecosystem by onboarding new partners in the areas of E&RD (utilities, Process industry and Consumer Products industry segments), Cyber Security (cloud workload and endpoint security, threat intelligence, and cyberattack response services), AI/Gen AI, e-commerce platforms, business consulting for Public Sector and Enterprise Integration Services. We continue to see significant global recognition across all our service offerings,” TCS said.

During the quarter, TCS expanded its partnership with Xerox to develop a new agile, cloud-first operating model in an end-to-end transformation programme designed to fast track the evolution of the company to a simplified, services-led, software-enabled organisation.

The company also collaborated with IIT-Bombay to develop India’s first Quantum Diamond Microchip Imager.

The company’s board has announced dividend of Rs 10 per share which is subject to shareholders’ approval.

TCS shares ended 0.33 per cent higher at Rs 3,922.70 ahead of its earnings announcement.