TCS beats estimates, Q1 net profit at Rs 6,310 crore

NEW DELHI: Tata Consultancy Services (TCS) on Thursday beat Street estimates with June quarter earnings, reporting a 9.9 per cent year-on-year (YoY) growth in net profit at Rs 6,317 crore, which was higher than an ETNow estimate of Rs 6,065 crore.

The IT exporter had reported a net profit of Rs 6,342 crore in the previous quarter.

On a quarter-on-quarter basis, net profit fell marginally by 0.4 per cent. The company reported a 3.7 per cent sequential growth in dollar revenue for the quarter, but operating margin fell below its target range.

In rupee terms, TCS’ revenue rose 3 per cent to Rs 29,305 crore. Net profit came in at Rs 6,317 crore.

The company’s operating margins contracted 98 basis points to 25.1 per cent, likely hurt by wage hikes. TCS had said it would maintain its operating margin between 26 per cent and 28 per cent.

TCS informed BSE that the directors have approved an interim dividend of Rs 6.50 per equity share of Re 1 each.

Headcount at the end of the quarter stood at 362,079, up by 8,236. TCS hired 90,182 people in FY16, its highest ever gross addition and indicated that its hiring would decrease this financial year due to the impact of automation.

Attrition fell to 12.5 per cent, the lowest level in several quarters.

The TCS stock closed 1.16 per cent higher at Rs 2,520 in Mumbai trading just before the earnings announcement. It rose to an intraday high of Rs 2,526 and a low of Rs 2,472 during the session.

(With inputs from ET Bureau's Jochelle Mendonca)