TCS Q1 Results: India's Largest IT Company Beats Estimates In Q1; Consolidated PAT Up 9% YoY To Rs 12,105 Cr

Tata Group-backed Tata Consultancy Services (TCS) beats estimates in the first quarter of FY25 results. In Q1FY25, TCS earned a consolidated net profit of Rs 12,105 crore, registering a growth of 8.86% from a net profit of Rs 11,120 crore in the same quarter a year ago.

However, sequentially, TCS' consolidated net profit dipped by 3.2% in Q1FY25 compared to PAT of Rs 12,502 crore in Q4FY24.

The net margin of TCS is at 19.2%, while net cash from operations stood at Rs 11,168 crore which is 92.8% of net income in Q1FY25. Also, in the quarter, operating margin was at 24.7%, which expanded by 1.5% YoY.

On the other hand, the top-line front witnessed growth on both YoY and QoQ basis. Consolidated revenue from operations stood at Rs 62,613 crore, recording a growth of 5.44% from revenue of Rs 59,381 crore in Q1FY24, and was also up by 2.5% from revenue of Rs 61,237 crore in Q4FY24.

In constant currency, the company's revenue growth is at 4.4% YoY in the quarter under review.

On segment-wise performance, constant currency performance was positive in the life sciences and healthcare business with a growth of 4%, while manufacturing biz CC growth was at 9.4%. Energy, Resources and Utilities, and Regional Markets & Others constant currency growth was at 5.7% and 37.7% YoY.

However, constant currency growth declined by 0.9% in BFSI, by 0.3% in the consumer business, and further down by 3.9% in Technology & Services, and CC was down by 7.4% in Communication & Media.

On a geographical basis, except for North America, all other key regions witnessed single-to-double-digit growth in Q1FY25. In North America, constant currency revenue declined by 1.1%. Business in North America has been sluggish since FY24.

Nonetheless, TCS earnings got a massive boost from India's business as CC growth jumped by 61.8% YoY. The composition of India business also rises to 7.5% in Q1FY25 in TCS compared to 4.9% in Q1FY24.

K Krithivasan, Chief Executive Officer and Managing Director, said: "I am pleased to report a strong start to the new fiscal year with all-round growth across industries and markets. We are continuing to expand our client relationships, create new capabilities in emerging technologies and invest in innovation, including a new AI-focused TCS PacePort in France, an IoT lab in the US and expanding our delivery centres in Latin America, Canada and Europe."

Also, Samir Seksaria, Chief Financial Officer, said: "Despite the usual impact of the annual wage increments in this quarter, we have delivered strong operating margin performance, validating our efforts towards operational excellence. We remain focused on making the right investments in R&I and talent, strengthening our superior return ratios and creating long-term value for our stakeholders."

TCS's workforce is at 606,998, a net addition of 5,452 employees in the quarter, while its LTM IT Services attrition rate is at 12.1%.

This Tata Group giant has also declared an interim dividend of Rs 10 per share having a face value of Rs 10 each, for FY25.Under its research and innovation initiatives, as of June 30, 2024, the company has applied for 8,194 patents, including 154 applied during the quarter, and has been granted 4,146 patents including 227 granted during the quarte.

Additionally, TCS was ranked a Leader in 42 competitive assessments published by leading research firms in Q1FY25.

Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world's largest businesses in their transformation journeys for over 56 years.