TCS Sees 5% Profit Growth In Q2, Revenue Rises 8% As AI, Cybersecurity Drive Demand
The TCS board approved a second interim dividend of Rs 10 per share, to be paid on 5 November, with a record date set for 18 October
Tata Consultancy Services (TCS) posted a 5 per cent year-on-year (YoY) increase in consolidated net profit for the second quarter of fiscal year 2024, reaching Rs 11,909 crore. However, this figure missed analysts' expectations.
The company's revenue from operations grew 8 per cent YoY to Rs 64,259 crore, while in constant currency terms, revenue growth for the quarter stood at 5.5 per cent. TCS’ operating margin slightly declined to 24.1 per cent, down 0.2 per cent from the previous year.
The TCS board approved a second interim dividend of Rs 10 per share, to be paid on 5 November, with a record date set for 18 October. The company continued to face cautious spending patterns, a trend seen in recent quarters, though certain segments like AI, cybersecurity, and cloud solutions saw increased investment.
"Amidst an uncertain geopolitical situation, our biggest vertical, BFSI showed signs of recovery. We also saw a strong performance in our Growth Markets. We stay focused on sharpening our value proposition to our clients, employees, and other stakeholders," said K Krithivasan, CEO and MD, TCS.
TCS said it saw a strong demand in areas such as artificial intelligence (AI), with over 600 AI and Generative AI engagements deployed or in development. Cybersecurity also witnessed growth as clients sought to enhance their security frameworks, especially in governance, risk and compliance, vulnerability management, and cloud security.
In addition, TCS Interactive, which focuses on customer experience and digital transformation, reported improved spending as clients looked to leverage data and technology for better returns on their marketing investments.
The company’s IoT and digital engineering services experienced rising demand, particularly in smart manufacturing and Industry 4.0 solutions, as industrial AI adoption increased. TCS also reported continued investments in enterprise resource planning (ERP) modernisation and cloud-based solutions, positioning itself as a key partner in clients’ digital transformation journeys.
TCS’ workforce strength reached 6,12,724 during the quarter, with a net addition of 5,726 employees. The last twelve months’ attrition rate for IT services stood at 12.3 per cent.
Despite facing headwinds in discretionary spending, TCS said in its statement that it remains focused on AI, cloud, and cybersecurity solutions as key growth drivers in the coming quarters.
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