TCS Q2 results ending 30 September 2024 have been announced. Despite global economic uncertainties and cautious client behavior, TCS, according to a statement issued by the company, continues to showcase resilient growth, driven by its diverse client base and strategic focus on expanding markets. The report, TCS says, highlights solid revenue growth, robust workforce management, and a commitment to innovation.
K Krithivasan, Chief Executive Officer and Managing Director, TCS said: “We saw the cautious trends of the last few quarters continue to play out in this quarter as well. 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”.
Key Financial Highlights of TCS Q2 Results
Samir Seksaria, Chief Financial Officer, 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”.
Revenue: TCS reported a revenue of US$7.67 billion, reflecting a 6.4% year-over-year (YoY) increase. In constant currency terms, the growth stood at 5.5% YoY.
Net Income: TCS posted a net income of US$1.42 billion, showing a modest 3.8% YoY growth. The net margin remained strong at 18.5%, maintaining profitability despite a challenging environment.
Operating Margin: The operating margin of 24.1% marked a slight decline of 0.2% YoY, indicating some pressure on operating efficiency.
Cash Flow: The company reported net cash from operations at US$1.4 billion, which represents 100.2% of net income.
Operational Highlights of TCS Q2 Results
Milind Lakkad, Chief HR Officer, TCS said: “We welcomed 11,000 associates in the first half of the year, and we remain on track for trainee onboarding as planned. We have also commenced the campus hiring process for FY26. Our strong talent base and increased learning intensity prepares us well for the complex technology transformations that customers entrust us with”.
Headcount and Workforce Strength: TCS added a net of 5,726 employees in Q2 FY25, bringing the total workforce to 612,724. Women make up 35.5% of the workforce, and the company employs individuals from 150 nationalities.
Attrition: TCS’s LTM (Last Twelve Months) IT services attrition rate stood at 12.3%, reflecting significant improvements in employee retention in a competitive industry.
Business Segment Performance
1. BFSI (Banking, Financial Services, and Insurance): The company’s largest vertical showed signs of recovery after a cautious trend in previous quarters, signaling stabilization in this critical segment amidst a volatile macroeconomic backdrop.
2. Growth Markets: Strong performance was noted in growth markets, suggesting that TCS’s geographic expansion and client diversification strategies are yielding results, helping buffer global uncertainties.
TCS also adds that its ongoing focus on research and innovation stills stands with 160 new patents filed and 223 patents granted during the quarter. The company continues to be at the forefront of technological innovation, holding a portfolio of 8,354 patents in total.
TCS continues to expand its intellectual property portfolio, with a focus on cutting-edge technologies to address the needs of future digital transformations. As of September 30, 2024, TCS had applied for 8,354 patents and had been granted 4,369. The company’s consistent innovation pipeline positions it strongly to capture market opportunities in areas such as AI, cloud, and cybersecurity.
Human Resources and Learning
TCS employees completed 26.1 million learning hours year-to-date (YTD), acquiring 2.6 million competencies. This investment in reskilling and upskilling ensures that the workforce remains aligned with the latest technology trends and client demands. The company has initiated campus hiring for FY26, maintaining a strong pipeline of young talent, essential for addressing the complex technology transformations their clients expect.
Dividend Announcement
TCS announced a dividend of Rs 10.00 per share, with a record date of 18 October 2024 and a payment date of 5 November 2024, reflecting its strong commitment to returning value to shareholders.
Industry Recognition
TCS’s leadership was recognized in 50 competitive assessments from research firms, with the company ranking number 1 in four key evaluations. These accolades underscore TCS’s global dominance in the IT services space.
Andrew Brothers, Chief Information Officer, Primark, said: “To help support our ambitious growth plans we’re expanding our partnership with TCS to build a robust, resilient, and reliable IT operating environment to become a more efficient, technology-led global organization with the agility to quickly adapt to changing demands and requirements in a fast-paced industry. Working with TCS will provide us with the ongoing operational stability and accountability needed to support our business to scale. This will allow us to respond to market trends and customer preferences in a timely manner, ensuring that we continue to deliver quality products at the best value for our customers.”
