Last Updated on November 20, 2023 by BFSLTeam BFSLTeam
Table of Content
Introduction
TCS (Tata Consultancy Services) is a global leader in the information technology services and consulting sector, providing a wide range of IT solutions to clients across the world. TCS, part of the Tata Group, has established itself as a trusted partner for businesses looking to leverage cutting-edge technology solutions. With a presence in various industries, including finance, healthcare, retail, and more, the company continues to drive innovation and digital transformation for its clients. The company’s key service lines include:
- AI.Cloud
- Cyber Security
- Enterprise Solutions
- IoT & Digital Engineering
- Cognitive Business Operations
- TCS Interactive
Our report will provide an unbiased and comprehensive overview of TCS’s performance for the recent quarter (Q2 2023). It will include financial data, strategic moves, Q2 earnings, and operational highlights that contribute to a well-rounded understanding of the company’s current standing.
Additional Read: Q2 Results Dashboard
Key Financial Metrics
Performance Highlights
- Revenue: ₹ 59,692 Cr
- Growth: 7.9% YoY
- Net Profit: ₹ 11,342 Cr
- Operating Margin: 24.3%
- Net Margin: 19.0%
- Order Book Value: ₹ 93,142 Cr
TCS Q2 results turned out to be better than most expectations with a 9% jump in YoY consolidated net profit for the quarter ended on 30th Sep, 2023. The Earnings Per Share (EPS) jumped to ₹ 31 per share from ₹ 28.51 in Q2 FY 22-23.
Additional Read: TCS Share Price
Management Commentary
Major Announcements
- Share buyback of up to ₹ 17,000 Cr approved by the board.
- Buyback share price set at ₹ 4150 per share.
- Interim dividend of ₹ 9 per share announced.
- S. Sukanya appointed as the CIO.
Operational Highlights
Some of the key wins and deals announced by TCS for the quarter include:
| Customer | Scope |
| BSNL | Nationwide infra deployment of advanced 4G and 5G mobile communication network, encompassing 1 Lakh telecom sites. |
| ASDA | Multi-year digital transformation and IT modernisation. |
| Jaguar Land Rover | IT transformation, application development &maintenance, cloud migration, cybersecurity, and data services. |
| Athora Netherlands | Enterprise Cloud Platform migration and closed books business transformation. |
| GE HealthCare | Digital transformation of global IT function. |
| Government of India | Transformation of the eGovernment eMarketplace (GeM) platform. |
| British Council | Transformation of support functions like HR, Finance, Procurements, and IT. |
TCS also announced the presence of over 250 additional gen AI opportunities in its funnel.
Additional Read: TCS Overview
Human Resources
As of 30th Sep, 2023, the company’s total headcount stands at 608,985 full-time employees. This is a reduction of 6,333 employees as compared to Q1 ‘24. The company is notable for its emphasis on diversity and inclusivity. It is visible in its workforce that encompasses 152 nationalities with an overall percentage of women employees of 35.8%. Talent development has been prioritised as well, with TCS employees clocking close to 26.4Mn learning hours YTD. Last Twelve Months attrition rate stood at 14.9%.
Additional Read: Tata Technologies IPO
YoY Comparison
Domain Performance
Although the BFSI sector remained to be the biggest slice of TCS pie, it showed a 0.5% decline YoY and currently stands at 32.6% of the company’s total revenues. Consumer business is the next biggest contributor at overall 15.9%. Life Sciences and Healthcare domain, the third biggest segment for TCS showed a spurt of 5.8% YoY. Other segments that showed a sharp YoY upward trend include Energy, Resources and Utilities (14.8%), Regional Markets & Others (14.3%), and Manufacturing (5.8%).
Market Performance
Most Indian IT companies rely on the North American market for a significant chunk of their revenues. TCS is no different with 51.7% of its revenue directly received from North American customers. Continental Europe and the UK account for approximately 31.4% of total revenues for the quarter.
The YoY constant currency growth registered by TCS for Q2 has been 2.8%. This includes big surges in smaller TCS markets of Middle East and Africa (15.9) and Latin America (13.1%).
Additional Read: Tata Group
Detailed Financial Statements
| Q2 FY 2022-23 | Q2 FY 2023-24 | |
| Total Revenue | ₹ 55,309 Cr | ₹ 59,692 Cr |
| Total Expenditure | ₹ 42,030 Cr | ₹ 45,209 Cr |
| Profit Before Taxes | ₹ 14,096 Cr | ₹ 15,330 Cr |
| Net Profit | ₹ 10,431 Cr | ₹ 11,342 Cr |
| Net Cash From Operations | ₹ 10,675 Cr | ₹ 11,823 Cr |
| Total Cash and Investments | ₹ 59,290 Cr | ₹ 59,677 Cr |
| 31 Mar, 2023 | 30 Sep, 2023 | |
| Accounts Receivable | ₹ 41,198 Cr | ₹ 42,422 Cr |
| Total Assets | ₹ 143,651 Cr | ₹ 154,940 Cr |
| Current liabilities | ₹ 43,558 Cr | ₹ 44,904 Cr |
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