The IT major reported a 7.05% decline in consolidated net profit to Rs 7,475 crore on a 2.97% increase in revenue to Rs 40,135 crore in Q2 September 2020 over Q2 September 2019.
Sequentially, the consolidated net profit grew 6.6% and revenue increased 4.73% in Q2 September 2020 (Q2FY21) over Q1 June 2020 (Q1FY21).
The company set aside Rs 1,218 crore under exceptional items related to a US lawsuit. The exceptional item relates to the compensatory damages TCS has to pay with regard to the intellectual property lawsuit filed by Epic Systems. In October 2014, EPIC had filed a legal claim against TCS in the court of Western District Madison, Wisconsin alleging infringement of Epic's proprietary information.
Consolidated profit before tax (PBT) stood at Rs 10,037 crore in Q1FY21, rising 5.61% from Rs 9,504 crore in Q1FY21. Total tax expense rose 3.18% to Rs 2,533 crore in Q2FY21 over Q1FY21.
TCS said that constant currency revenue for Q2FY21 rose 4.8% quarter-on-quarter. The IT major's operating margin stood at 26.2% in Q2FY21 from 23.6% in Q1FY21. The deal wins stood at $8.6 billion in Q2FY21, against $6.9 billion in Q1FY21.
BFSI (+6.2%), Retail and CPG (+8.8%) and life sciences and healthcare (+6.9%) led the growth. Technology & services grew 3.1%, manufacturing +1.4% while communications & media de-grew by 2.4%.
All markets showed good sequential growth, with North America growing 3.6%, UK +3.8%, and Continental Europe +6.1%: Emerging markets also grew well, with India growing 20%, MEA +8%, Latin America +5.5% and Asia Pacific +2.9%.
The company's consolidated headcount stood at 453,540 as of 30 September 2020. IT services attrition rate (last twelve months) hit an all-time low at 8.9%.
Meanwhile, the IT major's board approved a proposal to buyback up to 5.33 crore equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore, being 1.42% of the total paid-up equity share capital, at Rs 3,000 per equity share.
The board also declared an interim dividend of Rs 12 per equity share. The record date is set on 15 October 2020.
N Ganapathy Subramaniam, chief operating officer & executive director, said: "Our all-round performance this quarter is a huge endorsement of the increased relevance of our services and solutions to our clients as they pivot from risk mitigation to long-term resilience powered by cloud, digital and simplification of working methods. Clients are partnering us to leverage our thought leadership in SBWS, Vision 25 x 25 and Location Independent Agile to build a resilient, adaptable and future-proof operating model."
V Ramakrishnan, chief financial officer, said: "We have always maintained that growth is the best margin lever, and that is very evident in our numbers this quarter. It is very gratifying to see every financial metric precisely where we would like it to be, with a stellar operating margin despite neutral currency, strong cash conversion, and lowest ever DSO. We continue to invest in our people and are doubling down on building newer capabilities to power the next leg of our growth and market share expansion."
On Wednesday (7 October), shares of TCS rose 0.78% to 2737.40. It hit a record high of Rs 2769 in the intraday.
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