TCS Q1 Results FY 22-2023

The largest IT company in India in terms of market capitalisation, Tata Consultancy Services (TCS), declared its financial results on July 8, 2022, opening the season for Q1 FY23 results announcements. In its statement, it highlighted a continued growth momentum with a consolidated revenue from operations of Rs. 52,758 crore, showing an impressive 16.2% YoY growth and a 4.28% QoQ growth. The net cash from operations was recorded at Rs. 10,810 crore, which stands as 114.1% of net income. 

The Mumbai-headquartered company showed a 5.40% YoY increase in the Profit After Tax (PAT) to Rs. 9,519 crore in Q1 FY23 from Rs. 9,031 crore in Q1 FY22. However, there was a 2.4% YoY contraction in the operating margin in Q1, which was reported at 23.1%. Apart from this, the constant currency revenue showed a 15.5% YoY growth in the first quarter of this financial year.  

More on TCS Q1FY23

The attrition rate in the last twelve months for the IT services business came in at 19.7% for this behemoth company. TCS reported focusing on building a diverse and inclusive workforce, adding 14,136 new employees to the team, bringing the total headcount to 6,06,331. 35.5% of the strength was reported to be women.

The company also declared an interim dividend of Rs. 8 per equity share. The earnings per share stood at Rs. 25.90 for the quarter. However, the TCS share closed in the red at Rs. 3,266.00 ahead of the results, down 0.66% from the previous day at the end of the trading session.  

Hits

• Revenue for the quarter stood at Rs. 52,758 crore, a 16.2% YoY increase.
• Profit After Tax (PAT) increased 5.40% YOY to Rs. 9,519 crore in Q1 FY23 from Rs. 9,031 crore in Q1 FY22.
• Constant Currency revenue growth was 15.5% YoY. 
• Net Income was recorded at Rs. 9,478 crore, which increased 5.2% YoY. Of this, the net margin was 18%.

Misses

• The Operating Margin stood at 23.1%, showing a contraction of 2.4% YoY. 

Segment-wise revenue 

The following was the performance of the different sectors of the company: 

• Banking, Financial Services and Insurance: A YoY increase of 11.53% to Rs. 20,244 crore 
• Manufacturing: A YOY increase of 15.66% to Rs. 5,088 crore 
• Retail and Consumer Business: This segment showed 23.16% YoY increase to Rs. 8,832 crore 
• Communication, Media and Technology: An increase of 19.37% YoY to Rs. 8,848 crore 
• Life Sciences and Healthcare: 15.67% increase YoY to Rs. 5,667 crore 
• Others: Showed an increase of 20.72% YoY to Rs. 4,079 crore 

What the management says

Rajesh Gopinathan, the Chief Executive Officer and Managing Director said: “We are starting the new fiscal year on a strong note, with all-around growth and strong deal wins across all our segments. Pipeline velocity and deal closures continue to be strong, but we remain vigilant given the macro-level uncertainties. Our new organization structure has settled in nicely, getting us closer to our clients and making us nimbler in a dynamic environment. Looking ahead, we remain confident in the resilience of technology spending and the secular tailwinds driving our growth.” 

Other things to know about TCS

• The earnings per share for the quarter stood at Rs. 25.90.
• A net headcount addition of 14,136 was made, contributing to the strength of the team. 
• TCS aimed at being a diverse and inclusive workplace, with women making up 35.5%  of the workforce. The team comprises people from 153 nationalities.
• The attrition rate of the last twelve months stood at 19.7%.

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Research Analyst: Bavadharini KS