TCS Q1 Results: India’s largest IT services company Tata Consultancy Services (TCS) on Wednesday reported a consolidated net profit of 16.8 per cent at Rs 11,074 crore for the June 2023 quarter. The IT services major had reported a net profit of Rs 11,392 crore in the year-ago period.
In TCS Q1 result pre-view brokerage houses had said, TCS’ profit is likely to rise 16 per cent YoY to Rs 11,017 crore in April-June 2023 but sequentially it may fall 3.3 per cent.
Consolidated revenue increased nearly 13 per cent YoY to Rs 59,381 crore. Sequentially, the topline rose a mere 0.4 per cent, making this the slowest growth in 12 quarters for the country’s largest software exporter. The profit declined nearly 3 per cent from the March quarter.
EBIT margin or operating margin fell to 23.2 per cent from 24.49 per cent last quarter due to wage hikes announced on April 1.
“We remain confident in the longer-term demand for our services, driven by the emergence of newer technologies. We are investing early in building capabilities at scale on these new technologies, and in research and innovation," TCS chief executive officer K Krithivasan said.
“We are proactively building differentiating capabilities in generative AI and actively working on such projects with our clients, delivering impact on technology, operations and client experience dimensions," added N Ganapathy Subramaniam, chief operating officer, TCS.
TCS Interim Dividend
The board has approved an interim dividend payout of Rs 9 a share. “The interim dividend shall be paid on Monday, August 7, 2023, to the equity shareholders of the Company, whose names appear on the Register of Members of the Company or in the records of the Depositories as beneficial owners of the shares as on Thursday, July 20, 2023, which is the Record Date, fixed for the purpose," TCS said in a regulatory filing.
TCS on Hiring
The IT major indicated that it will not be very aggressive in hiring this year, and will instead focus on utilizing the people it has taken onboard last year.
“While we are committed to honor all the offers we have made, our focus will be on leveraging the capacity we built last year,” Milind Lakkad, Chief HR Officer of the company said.
The company, as such, net hired just 523 new employees during the three months ended June, taking its total workforce to 6.15 lakh.
This comes close on the heels of unprecedented hiring done by IT companies over the last two years as they struggled to cope with a sudden surge in contracts from the US and European markets.
The fight for talent had led to high levels of attrition in the IT industry. But Lakkad said the situation is expected to return to normal by the second half of the current year. As of the end of June, attrition was at 17.8% on a 12-month basis.
“Our attrition continues to trend down and we expect it to be back in our industry-leading, long term range in the second half of the year," he said.
