TCS Q2 FY25 results: revenue and profit rise amid global challenges and market caution
Tata Consultancy Services (TCS) continues to deliver solid performance in Q2 FY25. The TCS Q2 results analysis reveals steady growth despite global uncertainties.
TCS, part of the Tata group, posted a 5% rise in net profit and 7.65% growth in revenue. These results indicate that TCS earnings reflect resilience in an evolving market. However, the market’s muted response shows cautious optimism about the future.
Revenue Performance
The TCS Q2 revenue for the September 2024 quarter stood at ₹64,259 crore, representing a year-on-year growth of 7.65%. This growth is attributed to strong performance across several business segments. The revenue for TCS in this quarter was in line with street estimates, reflecting stable operations despite macroeconomic headwinds.
The growth in TCS Q2 revenue was driven by the Energy, Resources, and Utilities segments. Additionally, TCS’s operations in India saw a significant revenue boost of 95.2%, with further contributions from markets in the Middle East and Africa. North America, traditionally a strong market for TCS, witnessed a slight decline of 2.1% in revenue.
Profit and Margins
The TCS earnings in Q2 FY25 showed a 5% increase in net profit, reaching ₹11,909 crore. This modest growth reflects the IT giant’s ability to navigate global challenges, including geopolitical tensions. However, profit margins faced pressure, with operating margins declining by 0.2% year-on-year to 24.1%.
Despite this dip in margins, the company remains focused on long-term sustainability. The Tata group firm continues to invest strategically in talent and infrastructure, ensuring consistent growth while maintaining profitability.
Workforce and Attrition
In Q2 FY25, TCS added 5,726 new employees, bringing its total workforce to 6,12,724. Women constitute 35.5% of the workforce, reflecting the company’s commitment to diversity and inclusion. Attrition, a critical metric for IT companies, stood at 12.3%, down from previous quarters. This decline in attrition highlights TCS’s efforts to retain talent amid fierce industry competition.
Dividend and Market Reaction
The company declared an interim dividend of ₹10 per share and had specified a record date of October 18, 2024. This announcement indeed reflects the commitment of TCS in terms of shareholder value. But the market seems subdued when reacting to this analysis of the TCS Q2 results because shares closed 0.56% lower at ₹4,228.40. In fact, analysts have been arguing that such a decline perfectly represents the general apprehensive outlook of the market against some bigger concerns in the economy.
Conclusion
During global uncertainty, the quarterly results of TCS have been steady. Despite TCS coming out with earnings and revenue growth as expected, the bottom-line performance in terms of profit margins and market reaction were less favorable. Tata group is supporting long-term growth by strategic investment in TCS and an all-out thrust on innovation.
