TCS Q1 beats estimates, logs Rs 8,131 cr in net profit-dividend announced; CEO highlights Business 4.0 world

The Tata Consultancy Services (TCS) continued its steady financial show even in June 30, 2019 (Q1FY20) quarter, by reporting consolidated net profit of Rs 8,131 crore in Q1, higher by 10.77% compared to Rs 7,340 crore in the corresponding period of previous year. Q1FY20 PAT however was almost muted against Rs 8,126 crore recorded in the preceding quarter. A Bloomberg poll of analysts had predicted net profit of Rs 7,871 crore in this quarter. Meanwhile, consolidated revenue from operations witnessed growth of 11.41% to Rs 38,172 crore in Q1FY20 versus Rs 34,261 crore in Q1FY19, but gradually up by 0.42% as against Rs 38,010 crore in Q4FY19. 

Rajesh Goplnathan, Chief Executive OffIcer and Managing Director, said, "We have had a steady start to the new fiscal year. We see customers continuing to spend on their growth and transformation initiatives, and that is showing in our strong order book and deal pipeline this quarter." 

He added, "We are benefiting significantly from enterprises Investing in Customer Experience to differentiate themselves in a Business 4.0 world. Our lean forward strategy is working well and our customers are benefiting from the rcs innovation ecosystem. Customers appreciate our end-to-end capabilities, and our holistic approach to transforming customer journeys that enable rapid product Innovation and speed to value."

On revenue wise breakup, growth was broad-based across verticals. Life Sciences & Healthcare led the pack, growing 18.1%. The other verticals - BFSI (+9.2%)' Retail & ePG (+7.9%), Communications & Media (+8.4%), Technology & Services (+7.8%) and Manufacturing (+5.5%) - all showed industry-leading growth rates. 

Revenue growth was led by by UK (+16%), India (+15.9%) and Europe (+15%). Other markets showed good momentum: North America (+7.7%), Asia Pacific (+9.5%), MEA (+6.4%) and Latin America (+6.4%). 

Financial Highlights for Quarter Ended June 30, 2019:

• Revenue at Rs 38,172 crore, +11.4% YoY
• Constant Currency revenue growth: +10.6% YoY
• Net Income at Rs 8,131 crore, +10.S% YoY
• Operating Margin at 24.2%; Net Margin at 21.3%
• Earnings Per Share at Rs 21.67, +13.0% YoY
• Net Cash from Operations at Rs 8446 crore which is 103.9% of Net Income
• Dividend per share: Rs 5.00  

Business Highlights for Quarter Ended June 30,2019:

• Digital revenue: 32.2% of total, +42.1% YoY
• UK, Europe and India lead growth: +16% YoY. +15% YoY and +15.9% YoY respectively
• Continued investments in organic talent development:
• Net addition of 12,356 employees: highest' in 5 years
• 315K+ employees trained in digital technologies
• 361K+ employees in Agile methqds
• Industry-leading talent retention: IT Services attrition rate at 11.5% LTM 

In its meeting held on Tuesday, TCS board members also announced an Interim Dividend of Rs 5 per Equity Share of Rs 1 each of the Company.

Interim Dividend shall be paid on Tuesday, July 23, 2019 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 Wednesday, July 17,2019 which is the Record Date fixed for the purpose. 

On Tuesday, ahead of the result announcement, TCS shares ended at Rs 2131.45  down by Rs 44.65  or 2.05%.