Tata Consultancy Services kicked off the earnings season on a high note, however the stock is down 7% today (October 11, 2021). This could mainly due the company’s performance slightly below market expectations and on the back of concerns over supply-side challenges.
On that note, TCS posted its Q2 FY22 results and reported a 29% YoY rise in its net profit. The software giant reported a consolidated net profit of Rs 9,624 crore in this quarter over a net profit of Rs 7,475 crore in the year-ago period on the back of strong margins and increased demand.
The revenue from operations also increased by 16.8% YoY to Rs 46,867 in Q2 FY22 from Rs 40,135 crores in Q2 FY21. The company also recorded a net employee base of 528,748 employees after the end of the quarter, as of 30th September 2021.
Many verticals of the company showed double-digit growth in the last quarter. Here is a glimpse:
TCS has expanded its business in the international markets too. Here are the key figures:
The company’s management reiterated that the demand environment is very strong and is likely to continue to be strong going ahead, at least in the medium term. The pipeline continues to remain strong with a good mix of both low duration as well as large duration deals.
Here are a few developments that put TCS in the news over the last quarter –
The IT sector is a budding sector for the Indian economy as new and improved digital processes are slowly gaining popularity. TCS, being the largest IT company in India, has good growth potential in years to come, considering the deals acquired so far. And its pipeline (deals and contracts) continue to be robust which should aid in future growth. However, the management had indicated that the margin in the next 2-3 quarters could be soft due to the ongoing supply-side challenges and overseas travel restrictions. Since the company is expected to increase its employee base, it should be able to handle the challenges.