TCS Q2FY25 Results: Steady Growth Amidst Cautious Market
Tata Consultancy Services (TCS) reported Q2FY25 results showing steady growth. Revenue increased by 7.6% YoY, with notable performance in Energy, Resources and Utilities. The company maintained a strong financial position despite market uncertainties.
RI
by RA ALOK DAIYA SEBI Reg. INH000011468
Financial Performance Highlights
Revenue Growth
TCS achieved Rs 64,259 crore revenue, up 7.6% YoY. Constant currency growth was 5.5% YoY, indicating robust performance across markets.
Profitability
Operating Margin slightly declined to 24.1%. Net Income rose by 5.0% YoY to Rs 11,909 crore, with an 18.5% Net Margin.
Cash Flow
Net Cash from Operations was Rs 11,932 crore, representing 100.2% of Net Income. This demonstrates strong cash conversion efficiency.
Sector-wise Performance Analysis
1
Energy, Resources and Utilities
This sector led growth with a 7.0% increase. It reflects TCS's strong positioning in critical infrastructure sectors.
2
Manufacturing
The manufacturing vertical showed resilience with 5.3% growth. It indicates ongoing digital transformation initiatives in this sector.
3
BFSI Recovery
The Banking, Financial Services and Insurance vertical showed signs of recovery. This is crucial as BFSI is TCS's largest vertical.
Geographic Market Performance
All Growth Markets outperformed the company average. India's exceptional growth of 95.2% stands out, indicating strong domestic demand for IT services.
Workforce Dynamics and Diversity
Employee Growth
TCS's workforce reached 612,724, with a net addition of 5,726 employees in Q2.
Diversity
The company maintains a diverse workplace with 35.5% women and 150 nationalities represented.
Retention
The LTM IT Services attrition rate decreased to 12.3%, reflecting improved retention strategies and employee satisfaction.
Strategic Investments and Future Outlook
1
Talent Acquisition
TCS added over 11,000 employees in H1FY25, focusing on strategic talent acquisition for future growth.
2
Infrastructure Development
Investments in infrastructure aim to enhance operational efficiency and support sustainable growth initiatives.
3
FY26 Preparation
TCS has initiated campus hiring for FY26, ensuring a steady pipeline of fresh talent.
Shareholder Returns and Dividends
TCS declared a dividend of Rs 10 per share. The record date is set for 18/10/2024, with payment scheduled for 05/11/2024.
This dividend payout demonstrates TCS's commitment to delivering consistent returns to shareholders, even in challenging market conditions.
Management Perspective and Future Strategy
We stay focused on sharpening our value proposition to our clients, employees and other stakeholders.
CEO K Krithivasan emphasizes TCS's focus on value creation amidst market uncertainties. The company remains confident in its ability to deliver industry-leading profitable growth.
TCS continues to invest in enhancing its capabilities in emerging technologies and strengthening client relationships to drive long-term success.