Tata Consultancy Services (TCS) reported 10.1% rise in consolidated net profit to Rs 10,431 crore on 4.8% increase in revenue to Rs 55,309 crore in Q2 FY23 over Q1 FY23.
Profit before tax in Q2 FY23 stood at Rs 14,096 crore, up by 10.3% from Rs 12,776 crore in Q1 FY23.
As compared with Q2 FY22, the company's net profit and revenue have grown by 8.4% and 18%, respectively. Net margin for the quarter ended 30 September 2022 was at 18.9%.
Constant currency revenue growth was 15.4% YoY in Q2 FY23. Operating margin for the period under review was 24%, recording a contraction of 1.6% YoY.
Net cash from operations for the quarter ended 30 September 2022 was at Rs 10,675 crore, which is 102.3% of net income.
The company's order book total contract value (TCV) stood at $8.1 billion as on 30 September 2022 and the book to bill ratio was at 1.2.
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The board recommended an interim dividend of Rs 8 per share. The record date for the same is 18 October 2022 and the payment date is 07 November 2022.
During the quarter, the growth was led by Retail and CPG (22.9%), Communications & Media (+18.7%), and Technology & Services (+15.9%). Manufacturing as well as Life Sciences & Healthcare verticals grew +14.5%, while BFSI grew +13.1%.
Among major markets, North America led with +17.6% growth; Continental Europe grew +14.1% and UK grew +14.8%. In emerging markets, India grew +16.7%, Latin America grew +19.0%, Middle East & Africa grew +8.2% and Asia Pacific grew +7.0%.
TCS' workforce was at 616,171 as on 30 September 2022, a net addition of 9,840 during the quarter. IT services attrition was 21.5% on the last twelve months' basis (19.7% in Q1 FY23). With normalizing wage expectations and talent supply catching up across the industry, the company expects attrition to start to taper down in H2.
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."
N Ganapathy Subramaniam, chief operating officer and executive director, said: "This was another quarter of excellent execution that saw us delivering several transformational projects like the largest migration of 2.3 million policies to our TCS Insurance platform in one go in the UK, or the trading platform at the Gift City. Our delivery leadership congregated during the quarter and are raising the bar further on execution excellence with frameworks like Rigor in Transformation."
Samir Seksaria, chief financial officer, said: "We are steadily making our way towards achieving our operating margin priority for the year, aided by leverage from good growth, the flattening of the workforce pyramid, steadily improving productivity and currency support. Very importantly, the headwinds from the supply-side challenges are abating, so that sets us up well for the seasonally weak second half of the year."
Milind Lakkad, Chief HR Officer, said: "Our investments in capacity building and organic talent development have allowed us to substantially grow our business ahead of headcount addition this quarter. We believe our quarterly annualized attrition has peaked in Q2 and should see it taper down from this point, while compensation expectations of experienced professionals moderate."
Tata Consultancy Services is an IT services, consulting and business solutions organization. It offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions.
Shares of TCS shed 0.67% to settle at Rs 3264.85 on the BSE today.
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