TCS Q1 Results Highlights: Net profit rises 8.7% YoY to ₹12,040 crore, dividend announced

• Revenue at ₹62,613 crore, +5.4% YoY, +2.2% QoQ
• Net profit at ₹12,040 crore, +8.7% YoY, - 3.1% QoQ
• Dividend per share: ₹10
• Operating margin at 24.7%; an expansion of 1.5% YoY
• Net margin at 19.2%
• Net cash from operations at ₹11,168 crore i.e. 92.8% of net income
• Workforce strength: 606,998 | Net headcount addition of 5,452
• Diverse and inclusive workplace: Women in the workforce: 35.5% | 151 nationalities
• Last twelve months (LTM) IT Services attrition rate at 12.1%

• Expanded partnership with Xerox to develop a new agile, cloud-first operating model in an end-toend transformation program designed to fast track the evolution of the company to a simplified, services-led, software-enabled organisation.
• Collaborated with IIT-Bombay to develop India’s first Quantum Diamond Microchip Imager.
• Launched the Bringing Life to Things Lab in Cincinnati, Ohio, to support the rapid prototyping, experimentation, and large-scale implementation of AI, GenAI, and IoT engineering solutions, assisting clients in bringing innovative solutions to life faster and more efficiently.
• Selected by a leading American provider of higher educational services and products for Infrastructure Managed Services.
• Selected by Burgan Bank, a leading commercial bank in Kuwait, to redefine customer experience and create a modern core banking solution that strengthens its position as a pioneer of progressive banking in the region.
• Set up a Global Artificial Intelligence (AI) Center of Excellence in Paris, which will focus on the brain-machine interface, developing empathy in machines and unleashing the creativity of AI.
• Chosen as a strategic partner by a leading American home improvement retailer, to establish a Next-Gen technology and data architecture landscape to transform to an AI ready enterprise.

TCS, in a regulatory filing, said that all major markets return to sequential growth. It stated that very strong double-digit growth was seen in emerging Markets, led by India (+61.8% YoY).

"Almost all Verticals Return to Sequential Growth; YoY Growth led by Manufacturing (+9.4%), Energy, Resources & Utilities (+5.7%), and Life Sciences and Healthcare (+4.0%)," it said.

Growth by domain

Growth by markets

• TCS’ workforce stood at 6,06,998 as on June 30. The employee base is very diverse, with 35.5% women and with 151 nationalities.
• TCSers have clocked 11 million learning hours and acquired 1.2 million competencies. IT services’ attrition was at 12.1% for the last twelve months.

As on June 30, 2024, the company has applied for 8,194 patents, including 154 applied during the quarter, and has been granted 4,146 patents including 227 granted during the quarter.

K Krithivasan, Chief Executive Officer and Managing Director, said, "I am pleased to report a strong start to the new fiscal year with all-round growth across industries and markets. We are continuing to expand our client relationships, create new capabilities in emerging technologies and invest in innovation, including a new AI-focused TCS PacePort in France, IoT lab in the US and expanding our delivery centers in Latin America, Canada and Europe".

Samir Seksaria, Chief Financial Officer, said, "In spite of the usual impact of the annual wage increments in this quarter, we have delivered strong operating margin performance, validating our efforts towards operational excellence. We remain focused on making the right investments in R&I and talent, strengthening our superior return ratios and creating long term value for our stakeholders".

Milind Lakkad, Chief HR Officer, said, "I am delighted to announce the successful completion of our annual increment process. Our continued focus on employee engagement and development led to industry-leading retention and strong business performance, with the net headcount addition being a matter of immense satisfaction".

• N Chandrasekaran, Chairman
• K Krithivasan, Chief Executive Officer and Managing Director
• Samir Seksaria, Chief Financial Officer
• Milind Lakkad, Executive Vice President and Chief Human Resources Officer
• OP Bhatt, Director
• Aarthi Subramanian, Director
• Dr Pradeep Kumar Khosla, Director
• Hanne Birgitte Breinbjerg Sorensen, Director
• Keki M Mistry, Director
• Al-Noor Ramji, Director

• Current price: ₹3,910 (0.02%)
• Open: ₹3,931
• High: ₹3,980
• Low: ₹3,895.6
• Previous close: ₹3,909.1

In Q1 FY25, TCS is likely to report single-digit growth in its bottom line and topline, according to reports. The growth is likely to be driven by recovery in order inflows and increased discretionary spending by clients. Experts predict that the company’s margins could be negatively impacted due wage hikes.

Revenue and Profit

The global IT service provider’s net profit is likely to grow by 6-9% in Q1FY25, ranging between ₹11,771 crore and ₹12,140 crore, compared to ₹11,074 crore in Q1FY24, according to reports. Sequentially, the Tata Group company’s net profit is likely to decline by 3-5% against Q4 FY24. TCS’ revenue is likely to increase 4-5% on a year-on-year basis and may range between ₹62,086 to ₹62,491 crore, reports added.

• Current price: ₹3,940.6 (0.81%)
• Open: ₹3,931
• High: ₹3,980
• Low: ₹3,925.3
• Previous close: ₹3,909.1

According to experts, TCS is projected to report an upsurge in revenue due to multiple deals. However, the net profit is forecasted to slide over 3% in the June quarter. Earnings before interest and taxes (EBIT) margin might also contract by 130 points quarter-on-quarter to 24.7%.