TCS Q2 Results: IT firm's net profit up 5% YoY to Rs 11,909 crore

The company's net profit reached Rs 11,909 crore, up from Rs 11,342 crore in the same period last year.

In Short

• TCS Q2 net profit rises 5% to Rs 11,909 crore
• Revenue increases 8% to Rs 64,259 crore
• Interim dividend of Rs 10 per share declared

Tata Consultancy Services (TCS) posted a 5% rise in its consolidated net profit for the second quarter of the fiscal year 2025, which ended in September. The company's net profit reached Rs 11,909 crore, up from Rs 11,342 crore in the same period last year. However, this result was slightly below market expectations, as analysts had forecast a profit of Rs 12,450 crore.

TCS also reported an 8% year-on-year increase in its revenue, which stood at Rs 64,259 crore for the quarter, driven by growth across several sectors.

The company’s board has approved a second interim dividend of Rs 10 per share, which will be paid on November 5. The record date for this dividend has been set for October 18, 2024.

Performance overview

TCS noted that trends seen in previous quarters, such as caution in client spending, continued into this quarter. Despite global uncertainties, especially in the geopolitical sphere, the company’s largest vertical, Banking, Financial Services, and Insurance (BFSI), showed signs of recovery. TCS also highlighted strong performance in its growth markets.

K Krithivasan, CEO and Managing Director of TCS, said, "Amidst an uncertain geopolitical situation, our biggest vertical, BFSI, showed signs of recovery. We also saw a strong performance in our Growth Markets. We stay focused on sharpening our value proposition to our clients, employees, and other stakeholders."

In constant currency terms, the company’s revenue grew by 5.5% year-on-year during the June to September period. However, its operating margin for the quarter declined slightly by 0.2%, reaching 24.1%.

Key growth drivers

The company’s growth was mainly led by the energy, resources, and utilities segment, which grew by 7%. The manufacturing sector also performed well, with a 5.3% rise. Other segments such as BFSI, consumer, and life sciences saw a marginal growth of 0.1% each.

However, the technology and media services sectors experienced a 10% decline in constant currency terms, reflecting challenges in these areas.

Samir Seksaria, CFO of TCS, said, "We made strategic investments this quarter in talent and infrastructure to ensure sustainable growth. Our disciplined execution resulted in superior cash conversion. Our longer-term cost structures remain unchanged, and we remain confident in our ability to continue delivering industry-leading profitable growth."