Tata Consultancy Services Q2FY24 Financial Update
Tata Consultancy Services (TCS), India’s largest IT service company, reported a slight decrease of 1.1% in net profit for the second quarter ending September 30, 2024, amounting to Rs 11,909 crore. However, this marks a 5% increase compared to the previous year. The company’s revenue from operations rose to Rs 64,259 crore.
Dividend Announcement
TCS declared a second interim dividend of Rs 10 per share, with October 18, 2024, set as the record date for shareholder eligibility. Previously, an interim dividend of Rs 10 was paid on July 19, 2024.
Sector Performance and Strategic Focus
Revenue growth was driven by the Energy, Utilities, and Resources sectors. CEO K Krithivasan noted cautious trends but highlighted recovery in the BFSI sector and strong performance in Growth Markets. TCS remains focused on enhancing its value proposition for clients and stakeholders.
Financial Metrics
The operating margin for Q2 was 24.1%, down from 24.7% in the previous quarter, with a net margin of 18.5%. The company added 5,726 employees, bringing the total workforce to 612,724, with 35.5% women and representation from 150 nationalities.
Investments and Future Prospects
Chief Financial Officer Samir Seksaria emphasized strategic investments in talent and infrastructure for sustainable growth. TCS is also seeing momentum in AI/GenAI adoption and expects increased revenue from cybersecurity services. A significant Rs 15,000 crore deal with BSNL for data centers and 4G sites is expected to boost future growth.
Innovation and Patents
As of September 30, 2024, TCS had applied for 8,354 patents, with 160 new applications this quarter, and was granted 4,369 patents, including 223 this quarter.
Doubts Revealed
Tata Consultancy Services -: Tata Consultancy Services, or TCS, is a big company in India that helps other businesses with technology and computer services. It’s part of the Tata Group, which is a large group of companies in India.
Q2FY24 -: Q2FY24 stands for the second quarter of the financial year 2024. In India, the financial year starts in April and ends in March, so Q2FY24 refers to the months of July, August, and September in 2023.
Net profit -: Net profit is the amount of money a company makes after subtracting all its costs and expenses. It’s like the company’s earnings after paying for everything it needs to run its business.
Interim dividend -: An interim dividend is a payment made by a company to its shareholders before the final profits for the year are calculated. It’s like getting a part of the company’s earnings early.
BFSI -: BFSI stands for Banking, Financial Services, and Insurance. It’s a sector that includes banks, financial companies, and insurance firms.
Operating margin -: Operating margin is a measure of how much profit a company makes from its operations, before paying interest and taxes. It’s shown as a percentage of the company’s revenue.
Net margin -: Net margin is the percentage of revenue that remains as profit after all expenses, including taxes and interest, have been deducted. It shows how much of each rupee earned is kept as profit.
AI -: AI stands for Artificial Intelligence. It’s a technology that allows computers to think and learn like humans, helping them to solve problems and make decisions.
Cybersecurity -: Cybersecurity is the practice of protecting computers and networks from attacks or unauthorized access. It’s like keeping your computer safe from hackers and viruses.
BSNL deal -: BSNL is Bharat Sanchar Nigam Limited, a government-owned telecommunications company in India. A deal with BSNL means TCS is working on a project or agreement with this company.
