TCS Q1 net profit rises 17 pc to Rs 11,074 cr; North American market witnesses slower growth

Mumbai: The country's largest software exporter TCS on Wednesday reported a 16.83 per cent jump in its June quarter consolidated net profit to Rs 11,074 crore. The Tata Group company had reported a net profit of Rs 9,478 crore in the year-ago period and Rs 11,392 crore in the preceding quarter. Its revenue from operations increased 12.55 per cent on a year-on-year basis to Rs 59,381 crore and was marginally up from the preceding March quarter's Rs 59,162 crore. TCS is the first major company to report its June quarter results.

It can be noted that with headwinds in its key markets, the USD 250 billion Indian IT sector is widely expected to report volatility in the near term. In a statement, the company said its order book now stands at USD 10.2 billion and termed it a "robust" one. Its newly appointed chief executive and managing director K Krithivasan said, "We remain confident in the longer-term demand for our services, driven by the emergence of newer technologies". The company's operating profit margin increased marginally to 23.2 per cent from 23.1 per cent a year ago. Its chief financial officer Samir Seksaria said operating profit margin at 23.2 per cent number includes a 2 percentage points impact of the annual wage hike for employees.

TCS added 523 employees on a net basis to take its overall headcount to over 6.15 lakh as of June 30, 2023. The attrition rate was 17.8 per cent. Its chief of human resources Milind Lakkad said it has given a wage hike of 12-15 per cent to exceptional performers. From a segmental perspective, growth was led by clients in the life sciences and healthcare sector at 10.1 per cent, while its mainstay of banking, financial services and insurance grew only 3 per cent.

Among the geographies, the United Kingdom led with a 16.1 per cent revenue growth, while North America grew at 4.6 per cent. It can be noted that North America and BFSI – which constitute the biggest revenue pie for the sector – are the most affected in the current scenario, wherein some banks have gone down in the US due to asset-liability mismatches amid interest rate hikes to tame the runaway inflation by the Federal Reserve. The TCS scrip fell 0.36 per cent to close at Rs 3,260.20 apiece on the BSE on Wednesday against a 0.34 per cent correction on the benchmark.