TCS' Q2 net profit rises 8% to Rs 10,431 cr, firm declares Rs 8 dividend

IT major Tata Consultancy Services (TCS) on Monday reported 8% increase in consolidated net profit at Rs 10,431 crore for the quarter ending September 30, 2022 (Q2FY23) on the back of strong deal wins. It reported consolidated net profit of Rs 9,624 crore in the year-ago period. 

The firm's consolidated revenue from operations rose 18% to Rs 55,309 crore in Q2FY23 as against Rs 46,867 crore in Q2FY22. However, the Mumbai-headquartered IT major saw its operating margin narrow by 1.60 percentage points to 24%.

On Monday, TCS stock on NSE closed nearly 2% higher at Rs 3,124.

The company's board approved dividend of Rs 8 per share.

Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: “Demand for our services continues to be very strong. We registered strong, profitable growth across all our industry verticals and in all our major markets. Our order book is holding up well, with a healthy mix of growth and transformation initiatives, cloud migration and outsourcing engagements. As clients prepare for a more challenging environment ahead, technologies like cloud that have been embraced now have to be fully leveraged to realize the promised value. TCS has the combination of contextual knowledge, technology expertise and execution rigor to deliver on this imperative.”

"TCS’ workforce was at 616,171 as on September 30, 2022, a net addition of 9,840 during the quarter. The workforce continues to be very diverse, comprising 157 nationalities and with women making up 35.7% of the base. IT services attrition was 21.5% on the last twelve months’ basis. With normalizing wage expectations and talent supply catching up across the industry, the company expects attrition to start to taper down in H2," the company said in a stock exchange filing.

TCS also said it expected attrition to "taper down from this point, while compensation expectations of experienced professionals moderate".

The company's order book for July-September stood at $8.1 billion.

Market participants have been keenly watching TCS for signals on the demand outlook for the sector, which is staring at the possibility of a recession in the US and Europe from where they draw a bulk of their revenue.