TCS Q2 Results: Revenue Meets Estimates, Global Clients Remain Cautious

The company is witnessing “softness” in closing deals as it sees increasing caution among its clients. “It is taking some time to close the deals,” Chief Operating Officer N Ganapathy Subramaniam said.

Deal wins remained subdued and the largest deal win remained below $500 million.

“As clients prepare for a more challenging environment, technologies like cloud that have been embraced now have to be fully leveraged to realize the promised value,” Rajesh Gopinathan, chief executive officer and managing director at TCS, said in a statement.

The IT company, he said, has the combination of contextual knowledge, technology expertise and execution rigor to deliver on this imperative.

Geographically, North America continues to power the growth, Gopinathan said. “Latin America operations crossed $1.1 billion for customers and delivery for customers in the region.”

Even as supply-side pressures continue to persist, Samir Seksaria, chief financial officer said the challenges are now abating, which will bode well for the “seasonally weak” second half of the year.

The company had net employee additions of 9,840 during the quarter. With normalising wage expectations and talent supply catching up across the industry, the company expects attrition to start to taper down in the second half, it said in the statement.

Attrition will take at least four quarters to come down below 20% on LTM basis, Milind Lakkad, chief HR officer at TCS, said. But in absolute number it will come down beginning next quarter, he said.

“Our quarterly annualised attrition has peaked in Q2 and should see it taper down from this point, while compensation expectations of experienced professionals moderate,” Lakkad said.