TCS Q2 net profit dips 1%; announces special dividend at Rs 40 per share

TCS Q2 net profit dips 1%; announces special dividend at Rs 40 per share 1

The country’s largest IT company Tata Consultancy Services (TCS) has reported a 1.09% decline sequentially in its net profit for the quarter ended September 30, 2019, at Rs 8,042 crore compared to Rs 8,131 crore net profit in the previous quarter of the current financial year.

However, when compared to the year-ago period, the company has reported a mere 1.8% growth, as net profit of TCS in the last September quarter was Rs 7,901 crore.

The IT company’s revenues stood at Rs 38,977 crore in the September quarter, a 2.1% growth q-o-q, and 5.76% Y-o-Y, the company said in a BSE filing. In terms of currency revenue growth, the company witnessed 8.4% growth Y-o-Y.

In the Board Meeting, the directors have declared a second interim dividend of Rs 5 and a special dividend of Rs 40 per equity share. The second interim dividend and the special dividend will be paid on October 24 to the equity share holders of the company, the company said.

Rajesh Gopinathan, Chief Executive Officer and Managing Director of TCS said, “We ended the quarter with steady growth despite increased volatility in the financial services and retail verticals. We remain confident as the medium and longer term demand for our services continues to be very strong, as evidenced by our Q2 order book – the highest in the last six quarters.”

He added that digital disruption across multiple industries is making rapid, scalable innovation a critical imperative in the Business 4.0 world. “In the auto sector, our scale in advanced engineering R&D skills and depth in digital technologies like Al and loT are making us the preferred innovation partner to leading OEMs, embedding us deeply into their product R&D value chain. Our strategic partnership with – General Motors for their next generation mobility initiatives is a powerful illustration of this.”

TCS’ revenue growth was led by Life Sciences and Healthcare (+16%) and Communications & Media (+11.8%). While growth was led by Europe (+16%) and UK (+13.3%), North America and Asia Pacific grew 5.3% and 6.5%, respectively.

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said, “Our point of view on anchoring or participating in digital ecosystems, and the Business 4.0 framework, are clearly helping clients in their growth and transformation journeys. We continue to make significant investments in differentiating digital capabilities that are helping us participate in key growth areas of our clients technology spend – be it their cloud transformation, data maturity or in advancing their automation agenda.”

V Ramakrishnan, Chief Financial Officer, said: “We have been gearing up for growth despite the
volatility. Our margins in Q2 reflect our continued investments in our people, and in building the
capacity we need to fulfill our strong order book.”

Hiring going strong

Hiring continues to be very strong to fulfill the order book. Net addition in Q2 was 14,097, the highest ever number of employees to be on-boarded in a quarter, the company said. Consolidated headcount stood at 4,50,738 as of September 30, 2019. The company’s localisation initiatives continue apace, with 146 nationalities represented in the workforce. The percentage of women in the workforce rose further to 36.3%.

At the end of Q2, over 3,22,000 employees had been trained on multiple new technologies, and over 3,91,000 had been trained on Agile methods. The company continues to be the industry benchmark in talent retention, with the IT Services attrition rate (LTM) at 11.6%.

“By valuing our employees for the contextual knowledge they possess, and continually investing in equipping· them with newer technology skills, we have established an industry benchmark in our ability to attract and retain talent across the world. Their can-do attitude coupled with our progressive, performance-oriented culture is giving us a competitive edge in the market,” said Milind Lakkad, Global Head, Human Resources.

Shares down 1.23%

Meanwhile, on Friday afternoon, the company’s shares were trading at Rs 1,979.85, down 1.23% from its previous close.

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