tcs share price results q2 september profit revenues income sales bfsi brexit
Employees of Tata Consultancy Services (TCS) work inside the company headquarters in Mumbai March 14, 2013.Reuters file

Tata Consultancy Services (TCS) posted an increase of 8.37 per cent to Rs 6,603 crore in consolidated net profit for the second quarter (Q2) ended September 2016, in comparison to Rs 6,093 in the corresponding period last fiscal. Revenues rose 7.8 per cent to Rs 29,284 crore from Rs 27,165 crore in the year-ago period. On a sequential basis, there is a marginal decline in revenues.

In dollar terms, the company's revenues stood at $4,374 million and net profit at $986 million.

The company declared interim dividend of Rs. 6.50 per share, same as June quarter, according to regulatory filings with the Bombay Stock Exchange (BSE) on Thursday after market hours.

The record date for payment of dividend has been fixed as October 25 and the payout will be on November 2.

N Chandrasekaran on Q2 performance

"It has been an unusual Q2 for TCS. Growing uncertainties in the environment is creating caution among customers and resulted in holdbacks in the discretionary spending this quarter. In additional, volatility in markets like India and Latin America also muted revenue growth," N Chandrasekaran, CEO and MD, said.

"It has been a good quarter from a profitability perspective where despite multiple headwinds our disciplined approach and focus on operations has helped us deliver a strong margin performance," he added.

TCS shares lost 2.17 per cent to close at Rs 2,328.50 apiece on the BSE on Thursday. The September quarter (Q2) results were declared after market hours. Infosys will be declaring its Q2 results on Friday.

Client addition

The company added one client in the $50+ million category and six in the $20 million bracket.

Attrition

The company added 9,940 employees in Q2 to take the total headcount to 3,71,519 employees. The attrition rate dropped QoQ to 11.9 per cent. Women employees stood at 34.3 per cent of the total workforce.

Analysis

Angel Broking described the September quarter results as "underperformance."

In terms of vertical-wise revenues and growth, BFSI (40.4 per cent of sales) posted constant currency QoQ growth of 1.2 per cent, Retail & CPG (13.4 per cent of sales) revenues declined QoQ decline by 3.1 per cent.

Communication and media (11.4 per cent of sales) grew QoQ two per cent, manufacturing (10.7 per cent of sales) posted constant currency QoQ growth of 3.1 per cent, while healthcare rose 4.7 per cent QoQ, according to brokerage Angel Broking.

June quarter

For the June quarter, the company's consolidated net profit rose 9.4 per cent to Rs 6,318 crore and revenues increased 14.16 per cent to Rs 29,305 crore on a year-on-year basis. In dollar terms, revenues grew 8.1 per cent YoY to $4.36 billion and net profit 4.7 per cent to $940 million; digital revenues grew 15.9 per cent.