TCS Q1 Results: Profit Up 4%, Meets Estimates; Attrition Rate Near Two-Year High
Tata Consultancy Services' Q1 results showed a 4% rise in net profit to Rs 12,760 crore
Tata Consultancy Services Ltd. reported a 4% rise in net profit for the first quarter, in line with estimates, while revenue declined sequentially.
Consolidated net profit for the quarter ended June rose to Rs 12,760 crore from Rs 12,224 crore in the previous quarter. Bloomberg had estimated profit at Rs 12,253 crore.
Revenue fell 1.6% sequentially to Rs 63,437 crore from Rs 64,479 crore. The analyst consensus estimate tracked by Bloomberg was Rs 64,655 crore.
TCS Q1 Results Key Highlights (Consolidated, QoQ)
Revenue down 1.6% to Rs 63,437 crore versus Rs 64,479 crore. (Bloomberg estimate: Rs 64,655 crore).
EBIT down 1% to Rs 15,514 crore versus Rs 15,601 crore (Bloomberg estimate: Rs 15,703 crore).
EBIT Margin Margin at 24.5% versus 24.2% (Bloomberg estimate: 24.29%).
Net profit up 4% to Rs 12,760 crore versus Rs 12,224 crore (Bloomberg estimate: Rs 12,253 crore).
The company's Total Contract Value stood at $9.4 billion in the three months ending June, down from $12.2 billion in the preceding quarter.
"The continued global macro-economic and geo-political uncertainties caused a demand contraction," TCS Chief Executive Officer and Managing Director K Krithivasan said in a statement, adding that the software services provider's new services grew well and saw robust deal closures during this quarter.
Attrition And Employment
As of June 30, TCS increased its headcount by 6,071, bringing the total to 6.13 lakh. The IT services attrition rate was 13.8% over the past twelve months, the highest in nearly two years.
Shares of TCS ended 0.05% lower at Rs 3,382 apiece on the NSE ahead of the results announcement, compared to a 0.47% decline in the benchmark NSE Nifty 50. The stock has declined 13.49% over the past 12 months and 17.41% so far this year.
Out of 50 analysts tracking the company, 35 maintain a 'buy' rating, 12 recommend a 'hold' and three suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 12.1%.
