On July 11, 2024, Tata Consultancy Services (TCS) announced its financial results for the first quarter of the fiscal year 2025. India’s largest IT services company, has posted a 9% rise in net profit, reaching INR 12,040 crore.
Revenue from Operations Grows by 5.4%
TCS reported a 5.4% increase in revenue from operations. This amounts to INR 62,613 crore for the April-June period. As compared to INR 59,381 crore in the April-June period of 2023, there is significant rise. This growth reflects the company’s strong performance across various markets and sectors.
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Interim Dividend of INR 10 per Share Announced
Alongside the financial results, TCS has declared an interim dividend of INR 10 per share. The dividend will be paid on August 5, 2024. It will be paid to shareholders whose names appear on the company’s records as of July 20, 2024.
Total Contract Value Declines
Despite the positive financial performance, TCS disclosed a total contract value of USD 8.3 billion for the quarter. This marked a decline both year-over-year and sequentially. In the previous quarter, TCS had achieved a record high of USD 13.2 billion.
Growth Across Major Markets and Verticals
TCS experienced sequential growth in all major markets. Emerging markets, mainly India, showed a robust double-digit growth. This was nearly 62% year-over-year. The manufacturing sector led the year-over-year growth with 9.4%. This was followed by energy, resources and utilities at 5.7%. The life sciences and healthcare at 4.0%.
Employee Developments and Attrition Rate
Milind Lakkad, TCS’s Chief HR Officer, announced the successful completion of the annual increment process. The company continues to focus on employee engagement and development, resulting in industry-leading retention rates. The attrition rate for IT services over the past twelve months stood at 12.1%, with employees logging 11 million learning hours and gaining 1.2 million new competencies.
Operating Margin and Net Margin
TCS achieved an operating margin of 24.7% and a net margin of 19.2% for the reported quarter. This reflects a year-over-year expansion of 1.5% in the operating margin.
CEO and CFO Remarks on Q1 Performance
K Krithivasan, Chief Executive Officer and Managing Director, expressed satisfaction with the company’s strong start to the fiscal year. This shows growth across industries and markets. Samir Seksaria, Chief Financial Officer, emphasized the company’s efforts towards operational excellence. TCS focuses on making strategic investments in research, innovation and talent.
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Share Performance Ahead of Q1 Results
Ahead of the Q1 results announcement, TCS shares closed flat at INR 3,902 per share on Thursday, July 11, 2024. This is slightly lower than the previous close of INR 3,909 per share on Wednesday, July 10, 2024.
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About the Author
Mr. Radhesh Tarang Shah, is a management student at Institute of Management, Nirma University. He has a passion for writing articles and poems. He has experience as a financial analyst, author, news writer, marketer and social worker.
