TCS Q2 profit falls 2% to Rs6,446 crore

Reuters

Reuters

TCS has declared a whopping 700 per cent second interim dividend of Rs 7 per share of Re 1 face value. "By sharpening our focus on individual components of the Digital service stack, we have been able to bring to bear the full power of our contextual knowledge, research and innovation, and investments in location-independent agile, automation and cloud on our customers' transformational imperatives and become a trusted partner in their Business 4.0 journeys", Gopinathan said. The company reported an operating profit or Ebit (earnings before interest and tax) of Rs 7,660 crore.

TCS registered revenues at Rs 30,541 crore in the second quarter of 2017-18, up 4.3 per cent from Rs 29,284 crore in the year-ago period.

The Mumbai-based company had posted net profit of Rs 6,586 crore in the July-September quarter of the last fiscal, the company said in a BSE filing. On a year on year basis, all industry verticals - with the exception of BFSI (banking and financial services) and retail - grew above 9.5 per cent. Analysts said the numbers are positive, despite lack of growth from retail and incomplete recovery in technology spending from banking clients."The company's numbers have been relatively better and it has seen an operational outperformance". The revenue expansion was driven by strong business volumes that grew more than 3% sequentially, he said. While outsourcing for legacy services grew marginally by 1.4 per cent, almost 44 per cent of the global contracts were in digital or deals that had vendors deliver product or solutions as a service.TCS said it won one client with $100 million, while six clients each in the band of $50 million, $20 million, and $10 million. The guidance of 26-28 per cent continued to be elusive, but the company continues to chase the targeted band, TCS chief financial officer V Ramakrishnan said, adding that it has not changed its currency hedging policies despite volatilities in the market.

It added 15,868 employees in the quarter. Strong, broadbased client metrics this quarter demonstrates our increasing success with newer customers.

Gopinathan said the apprehension that fintech would disrupt the BFSI space had not proven to be true.

N. Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: "it has been a very satisfying performance this quarter, striking a good balance between pursuing revenue growth, particularly in Digital opportunities, while tightening our execution to deliver greater efficiency".

Stating that BFS in Europe is doing good, Gopinathan said banks have moved beyond the fear of being disrupted by the fintech firms and are now experimenting on collaborative models, where he claimed TCS is having a foothold, and the future portends better prospects for the company.

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