TCS Q2 net profit up 6%

BFSI, retail and life sciences biz propel growth

India’s largest software company IT major Tata Consultancy Services (TCS) has posted a 6.1 per cent increase in net profit for the second quarter ended September 30, 2015, at Rs 6,055.2 crore, compared with Rs 5,708.9 crore in the sequential quarter (April-June 2015).

Revenues for the company during the reported quarter grew 5.8 per cent to Rs 27,165.5 crore, compared with Rs 25,668.1 crore in first quarter of the current fiscal. On a constant currency basis, the company’s revenues grew 3.9 per cent. “Growth in the quarter has been broad-based with BFSI, retail and life sciences seeing good growth. We had seen softness in Japan, Latin America, and Diligenta, in the first quarter. However, the company has managed to overcome the softness in Latin America,” TCS Chief Executive Officer and Managing Director N Chandrasekaran said.

The order book during the quarter is the highest-ever for the company in a quarter, and is 30 per cent higher than won ever before, Chandrasekaran said, adding that the softness in Diligenta and Japan is likely to continue for the next few quarters.

During the second quarter, the count of $100 million-plus customers increased by three, while that of $10 million increased by six. Margins stood at 27.1 per cent while volume growth was at 4.9 per cent.

“In a dynamic external environment, we continue to manage our operations with discipline and agility to ensure that we can support business growth. Our focus on profitability has increased our margins sequentially, and generated strong cash flows, while investing for future growth,” TCS Chief Financial Officer Rajesh Gopinathan said.

According to Chandrasekaran, the Indian business for the company continues to remain volatile. “Indian business has always been volatile. We cannot say whether it can deliver higher level of sequential growth.”

The company also continues to look out for inorganic growth opportunities. “We are always on the lookout for acquisitions. We will not do acquisitions just because we want to grow. We are looking for acquisitions that adds distinctive capability for the company,” Chandrasekaran said.