Published: Fri, October 13, 2017
Finance | By Loren Pratt

TCS Q2 net profit rises 8.3% QoQ

TCS Q2 net profit rises 8.3% QoQ

From the geographical perspective, the largest market of the United States showed some softness, which was attributed byGopinathan to the tech maturity in the market, which is resulting in faster growth in other markets which are catchingup.US' share of revenues has declined to 51.6 per cent from the year-ago's 54 per cent. TCS is the first IT major to report its numbers for the quarter, and performance reviews of its peers like Wipro on October 17 and Infosys on October 24 will be keenly watched.

Under the Indian Accounting Standards (IAS), the global software major reported Rs 6,446 crore net profit for Q2, registering 8.4 sequential growth from Rs 5,945 crore last quarter but a 2.1 per cent annual decline from Rs 6,586 crore in the same period a year ago. Volume growth came in at 3.2%, which was also decent; although ultimately what matters is revenue growth, especially given the challenges on that front in recent years.

Commenting on Q2 earnings, CEO and managing director Rajesh Gopinathan said: "We experienced robust volume growth in Q2, driven by good demand across multiple industry verticals". Strong, broad-based client metrics this quarter demonstrates our increasing success with newer customers.

Gopinathan added: "We continue to gain share In the fast growing Digital spend of our customers, evident in our Industry-leading Digital growth in Q2".

The results of TCS, the first to report quarterly earnings among Indian software exporters, augur well for the nation's information technology sector amid concerns companies could report muted financial performance in the second quarter because of a slowdown in the USA financial services and retail industries.

Shares of the company gained Rs 48.05, or 1.92%, to settle at Rs 2,548.55.

TCS has declared a whopping 700 per cent second interim dividend of Rs 7 per share of Re 1 face value.

Mumbai-headquartered TCS on Thursday posted a 2 percent decline in second-quarter profit on Thursday, held back by sluggish growth in the banking and retail sector. With the exception of retail and CMI, all industry verticals grew above the company average, led by travel & hospitality (up 8 per cent quarter on quarter), energy & utilities (up 7.2 per cent Q-o-Q) and life sciences & healthcare (up 3.6 per cent Q-o-Q).

TCS said most businesses, barring financial services and retail, grew above 9.5% in the last quarter.

TCS Chief Operating Officer N. Ganapathy Subramaniam said headwinds across sectors are slowly abating.

Business in North America which generates more than half of TCS's revenues remained soft as the BFSI vertical continued to lag. "We expect stronger and steadier growth ahead".

"Our investment programme remains geared for growth".

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