Tata Consultancy Services (TCS), on Thursday, kicked off the Q1 earnings season with a 13.8 percent year-on-year decline in net income at Rs 7,008 crore. Its revenue rose by 0.4 percent at Rs 38,322 crore for the June-ended quarter.
For the April-June 2020 period, TCS' Life Sciences & Healthcare was the only segment that recorded growth. The vertical reported a growth of 13.8 percent from a year ago. The banking, financial services and insurance, also called BFSI segment declined 4.9 percent, Retail & CPG by 12.9 percent, Communications & Media fell 3.6 percent, Manufacturing was down 7.1 percent, while Technology & Services slipped 4 percent, from their performance in the same period a year ago.
"The revenue impact of the pandemic played out broadly along the lines we had anticipated at the start of the quarter. It affected all verticals, with the exception of Life Sciences and Healthcare, with varying levels of impact. We believe it has bottomed out, and we should now start tracing our path to growth," said Rajesh Gopinathan, CEO and MD.
Shares of the company closed 0.29 percent lower at Rs 2,212.50, ahead of the results.
The company declared an interim dividend of Rs 5 per share. "The Interim Dividend shall be paid on Friday, July 31, 2020 to the equity shareholders of the Company, whose names appear on the Register of Members of the Company or in the records of the
Depositories as beneficial owners of the shares as on Friday, July 17, 2020 which is the Record Date fixed for the purpose," the company said in a stock exchange filing.
Outsourcing contracts affected by COVID-19
Earlier today, before TCS' results were declared, a report on an analysis of outsourcing contracts by Information Services Group (ISG) indicated a notable slowdown in deal activity. It showed that total commercial outsourcing contracts with an annual contract value of $5 million or more declined 5 percent in the June-ended quarter as enterprises reduced spending on managed services.
Segmental analysis shows a notable decline in financial services deal activity where large Indian IT companies like TCS and Infosys Ltd derive more than 30 percent of their revenues from, especially from the banking, financial services and insurance (BFSI) vertical.