TCS Q2 Results Highlights: ₹11,909 Cr Profit, Dividend Declared

TCS Q2 Results Highlights. In spite of economic difficulties, Tata Consultancy Services (TCS), a world leader in IT services and consulting, recently revealed its Q2 FY25 results, which demonstrate steady performance. With impressive financial results and significant advancements in partnerships, innovation, and human resources, TCS keeps solidifying its position as the industry leader in IT.

Revenue and Profit Growth in Q2 FY25

TCS reported consolidated revenue of ₹64,259 crore** for the July-September quarter, which represents a 7.6% year-on-year (YoY) rise from ₹59,692 crore in Q2 FY24. The sales increased 2.6% sequentially from the prior quarter, demonstrating the company’s capacity to produce steady growth.

The company’s operational strength was demonstrated by its 4.9% YoY increase in net profit, which came to ₹11,909 crore. The net profit did, however, indicate a 1% decline from the previous quarter, which suggests some pressure from the current global economic issues.

Strong Dividend Declaration

For FY25, the second interim dividend of ₹10 per equity share was announced by TCS’s Board of Directors. This is in line with the business’s steady dividend strategy, which aims to give shareholders enticing returns. The dividend will be paid on November 5, 2024, with the record date falling on October 18, 2024.

Cash Flow and Financial Health

As shown by net cash from operations amounting to ₹11,932 crore, or 100.2% of its net income, TCS continues to exhibit strong financial health. This demonstrates the business’s operational effectiveness and capacity to turn profits into real cash flow.

Furthermore, TCS’s solid balance sheet and sound financial management techniques are responsible for its ability to sustain such a high level of cash flow from operations despite erratic market conditions.

Segment-Wise and Regional Performance

In Q2 of FY25, the company’s performance differed by vertical and area. With a 6.8% YoY increase in constant currency, Latin America helped boost revenue growth in the Americas. However, TCS’s primary market, North America, witnessed a 2.1% YoY decline in sales. In light of the overall economic recession, this decline reflects the cautious spending patterns of significant clients in the financial and technology sectors.

The Energy, Resources, and Utilities segment of TCS saw a 7% YoY rise, while the Regional Markets and Others section had an impressive 50.4% YoY growth in constant currency. However, due to the slowdown in tech investment, income from Technology Services, Communication, and Media decreased.

Research and Innovation Initiatives

TCS’s strategy is still centred on innovation. The company has filed 8,354 patents as of September 30, 2024, including 160 new applications this quarter. In Q2, TCS received 223 patents, increasing its total patent count to 4,369.

This ongoing investment in intellectual property demonstrates TCS’s commitment to developing state-of-the-art technological solutions and keeps it at the forefront of innovation. The business’s continuous investigation into cutting-edge fields like AI, blockchain, and sustainability enhances its competitive advantage. TCS Q2 Results Highlights.

Client Testimonials and Success Stories

Customers of TCS from a variety of industries still have faith in the company’s abilities. During this quarter, noteworthy endorsements from important clients include:

TCS’s role in its hydrogen research program was praised by Alan Newby, Director of Research and Technology at Rolls-Royce, who also highlighted the vital role that TCS’s engineering expertise plays in the aviation sector’s energy transition.

• Margot Torres, Managing Director at GADC (Golden Arches Development Corporation), highlighted how the company’s digital transformation would be fuelled by the deployment of SAP S/4HANA on RISE.
• Shibashish Roy, Deputy CEO of Croma, praised TCS for enabling a seamless omnichannel journey for customers through their OmniStore platform, which enhances both customer experience and operational efficiency. TCS Q2 Results Highlights.

TCS’s Expanding Workforce and Learning Initiatives

With a net headcount addition of 5,726, TCS’s workforce strength as of the end of Q2 FY25 was 612,724 employees. With 35.5% women and 150 nationalities represented, the workforce is still remarkably varied.

By recording 26.1 million learning hours and allowing employees to obtain 2.6 million competencies year-to-date (YTD), TCS is demonstrating its continued commitment to investing extensively in its workforce. These numbers demonstrate TCS’s dedication to upskilling its employees, which is essential for facilitating the intricate technological transitions that its clients entrust to the business.

Over the past 12 months, Attrition in IT services has stayed under control at 12.3%, demonstrating the company’s efforts to retain personnel in a competitive labour market. TCS Q2 Results Highlights.

Key Business Developments and Partnerships

TCS has been actively expanding its strategic partnerships and client base in diverse industries and regions. Some of the notable developments during Q2 FY25 include:

• Sydney Marathon: TCS entered into a five-year partnership with Australia’s largest marathon to enhance the event’s use of advanced technologies, sustainability practices, and accessibility.
• Rolls-Royce: The company expanded its partnership with Rolls-Royce to advance research into hydrogen fuel systems for sustainable aviation.
• ASDA: TCS will help streamline the IT infrastructure of ASDA, one of the UK’s largest supermarket chains, to enhance operational efficiency.
• Banco de Crédito del Perú (BCP): Selected TCS to transform its IT landscape to drive digital transformation in the financial services sector.
• Qantas: TCS will manage Qantas’ Airline Technology Domains, supporting its cloud transformation journey and enabling an operating model shift to maximize efficiency.

Management Commentary on Q2 FY25 Results

With a net headcount addition of 5,726, TCS’s workforce strength as of the end of Q2 FY25 was 612,724 employees. With 35.5% women and 150 nationalities represented, the workforce is still remarkably varied. TCS Q2 Results Highlights.

By recording 26.1 million learning hours and allowing employees to obtain 2.6 million competencies year-to-date (YTD), TCS is demonstrating its continued commitment to investing extensively in its workforce. These numbers demonstrate TCS’s dedication to upskilling its employees, which is essential for facilitating the intricate technological transitions that its clients entrust to the business. TCS Q2 Results Highlights.

Over the past 12 months, Attrition in IT services has stayed under control at 12.3%, demonstrating the company’s efforts to retain personnel in a competitive labour market.

The BFSI vertical, which started to show indications of recovery in the face of uncertain geopolitical situations, was one of the cautious trends that were noted during the quarter, according to K Krithivasan, CEO and Managing Director. He underlined TCS’s emphasis on honing its value proposition to help stakeholders and clients negotiate the challenging market landscape. TCS Q2 Results Highlights.

The company’s strategic investments in talent and infrastructure, along with its strong cash conversion, are what position TCS for long-term, sustainable growth, according to CFO Samir Seksaria. TCS Q2 Results Highlights.

The Chief Human Resources Officer, Milind Lakkad, noted that TCS had started campus hiring for FY26 and had welcomed 11,000 new associates in the first half of the year. In order to satisfy the demands of the company’s complex technology transformations, this guarantees a consistent supply of skilled talent. TCS Q2 Results Highlights.

Conclusion

Here are five FAQs related to TCS Q2 Results:

TCS continues to showcase resilience in its financial and operational performance amid global uncertainties. With robust revenue growth, strategic partnerships, innovation, and a strong focus on human capital development, the company is well-positioned for sustained success. TCS’s leadership in IT services, backed by a consistent dividend policy, makes it a reliable performer in the global market. TCS Q2 Results Highlights.