- TCS posted Q2 revenue of Rs 73,188 crore, up 1.3% sequentially, with Rs 13,884 crore net profit
- AI revenue exceeded $3.1 billion, accounting for over 10% of TCS’s total revenue this quarter
- TCS struck a five-year deal with Porsche and acquired its consulting arm, MHP
Tata Consultancy Services logged a profitable second quarter, with the bottomline exceeding analyst estimates. The IT major showcased steady financial growth alongside significant strides in artificial intelligence and strategic acquisitions. Here is a breakdown of the top five highlights from the latest earnings report.
Profitable Quarter
TCS posted a second-quarter revenue of Rs 73,188 crore, up 1.3% sequentially. This was largely in line with the estimate shared by the analysts tracked by Bloomberg. The net profit came in at Rs 13,884 crore, up 4% as compared to the preceding quarter.
The company's earnings before interest and taxes rose 1.4% sequentially to Rs 17,553 crore, whereas the margins rose marginally to 24% from 23.95% in the first quarter.
The IT major also declared a dividend of Rs 12 per share, while fixing Oct. 14 as the record date to determine the eligibility of shareholders for the dividend payout.
AI Revenue Surge
The company is seeing massive momentum in artificial intelligence. Annualized AI revenue has now crossed the $3.1 billion mark. This means AI services now account for more than 10% of the total revenue. Management noted that demand continues to accelerate rapidly for AI-native solutions and AI-led transformations of enterprise systems.
“Demand for delivering business outcomes with AI-native solutions, AI-led transformation of enterprise systems and autonomous GBS, continues to accelerate," stated Aarthi Subramanian, Executive Director and Chief Operating Officer.
Strategic Mega Deals
TCS announced a major five-year strategic partnership with Porsche AG. As a core part of this agreement, TCS will acquire a 100% stake in MHP, the Germany-based management and IT consulting subsidiary of Porsche. In another significant move, TCS reached an agreement to transition Best Buy's Global Capability Center in India over to TCS. This facility will be transformed into a dedicated AI Capability Center to develop advanced AI-powered solutions.
“This quarter we announced two unique deals with Porsche and Best Buy which represent a new category of transformation partnerships. Together with our clients, we are building repeatable value platforms that will industrialize AI at scale,“ said K Krithivasan, Chief Executive Officer and Managing Director.
ALSO READ: TCS Q2 Results: Profit, Revenue Meet Estimates; Dividend Declared
Sectors Driving Growth
Growth across business domains was primarily led by the Banking, Financial Services, and Insurance (BFSI) sector, which grew by 2.5% sequentially in constant currency. The Manufacturing sector, alongside Technology and Services, also posted strong quarter-on-quarter constant currency growth of 3.1% each. On a regional basis, the United Kingdom market saw a solid 3.5% sequential growth.
Workforce Expansion
The IT giant maintained a stable workforce environment, with last-twelve-months attrition for IT services holding steady at 13.3%. The total employee base reached 598,056 workers during this quarter. To keep up with evolving technology trends, the company emphasized upskilling, resulting in a 17% sequential increase in learning hours.
“We continue to build a future-ready workforce through upskilling our employees and hiring top talent. Investments in learning and critical skills drove a 17% sequential increase in learning hours to 17.1 million. This quarter our employee base reached over 598,000, while attrition remained stable at 13.3%,” said Sudeep Kunnumal, Chief HR Officer.
ALSO READ: TCS Q2 Headcount: 4,258 Employees Added As Attrition Slips To 13.3%
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.