Country’s largest IT services exporter TCS on Tuesday met market expectations with an over 16 per cent rise in net profit at Rs6,084.66 crore for the quarter to September, backed by strong performance of its digital platform and recovery in latin America and the home market.
Tata Consultancy Services’ (TCS) order book grew 30 per cent in the quarter, the highest ever for the company, giving the indication that things are looking good, managing director & chief executive N Chandrasekaran told reporters here this evening.
“We have delivered accelerated growth in constant currency terms for Q2. Driven by great execution on the ground, our broad-based performance has been led by strong sequential growth in BFS, retail and life sciences verticals with Britain and North America leading the markets,” he said.
“Our digital platform has been very high. Digital has seen tremendous traction. Our revenues from the digital platform has jumped to 13.3 per cent from 12.5 per cent quarter-on-quarter,” Chandrasekaran, who was recently given another five-year term, added.
Observing that its attrition rate, which stood at 16.2 per cent in Q2, has stabilised compared to previous quarter, the company said it is working on steps to further bring it down in third and fourth quarter of the fiscal.
“Attrition in absolute number has come down compared to last year. I am quite hopeful that all the initiative we are taking to control attrition will pay out. In Q3 and Q4 the attrition is expected to come down further,” executive VP and global head Ajoy Mukherjee said.
“In India too attrition has come down compared to last quarter and month on month we have seen a decline,” he added.
Meanwhile, Ravi Shenoy of Motilal Oswal Securities termed the numbers as per estimate.
“Traction in digital services and solutions which forms 13.3 per cent of revenues continues to be strong with a 10.7 per cent Q-o-Q growth. Margins were better than estimates at 27.1 per cent, he said, adding the brokerage is remains neutral on the TCS counter, which closed 0.2 per cent up at Rs2,597.40 on the BSE which main index shed 0.21 per cent on Tuesday.
Another analyst Sarabjit Kour Nangra from Angel Broking said, “TCS posted results below expectation on sales front and net profit, while the EBIT margins remained in line with expectations.”
According to Sanjoy Sen of Aston Business School, “At a time when Indian IT providers are reinventing themselves as end-to-end business solution providers, harnessing disruptive digital technologies and establishing newer subsidiaries in new geographies to create strategic advantage for their global clients, it is not easy to hold fort on market expectations.”