TCS Delivers Steady Growth in Q2
- Q2 CC Revenue Growth of 8.4% YoY
- UK (+13.3% YoY) and Europe (+16% YoY) Drive Growth
- Digital Revenue at 33.2%, Growth of 27.9% YoY
- Net Margin at 20.6%; EPS Growth: 3.8% YoY
- Special Dividend of ₹40 per share
MUMBAI, October 10, 2019: Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading global IT services, consulting and business solutions organization, reported its consolidated financial results according to Ind AS and IFRS, for the quarter ending September 30, 2019.
Financial Highlights for Quarter Ended September 30, 2019
- Revenue at $5,517 million, +5.8% YoY
- Constant Currency revenue growth: +8.4% YoY
- Net Income at $1,139 million, +1.8% YoY
- Operating Margin at 24%; Net Margin at 20.6%
- Earnings Per Share at $0.3, +3.8% YoY
- Net Cash from Operations at 108% of Net Income
- Total Dividend per share of ₹45 per share including ₹40 as special dividend
Record date 18/10/2019; Payment date 24/10/2019
Business Highlights for Quarter Ended September 30, 2019
- Digital revenue: 33.2% of total, +27.9% YoY
- Life Sciences & Healthcare continues to outperform, +16% YoY; Communications & Media grew +11.8%
- UK and Europe lead growth: +13.3% YoY and +16% YoY respectively
- Net addition of 14,097 employees: highest ever number of employees onboarded in a quarter
- Continued investments in organic talent development:
- 322K+ employees trained in digital technologies
- 391K+ employees trained in Agile methods
- Industry-leading talent retention: IT Services attrition rate at 11.6% LTM
Commenting on the Q2 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said,“We ended the quarter with steady growth despite increased volatility in the financial services and retail verticals. We remain confident as the medium and longer term demand for our services continues to be very strong, as evidenced by our Q2 order book – the highest in the last six quarters.”
He added,“Digital disruption across multiple industries is making rapid, scalable innovation a critical imperative in the Business 4.0™ world. In the auto sector, our scale in advanced engineering R&D skills and depth in digital technologies like AI and IoT are making us the preferred innovation partner to leading OEMs, embedding us deeply into their product R&D value chain. Our strategic partnership with General Motors for their next generation mobility initiatives is a powerful illustration of this.”
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said, “Our point of view on anchoring or participating in digital ecosystems, and the Business 4.0™ framework, are clearly helping clients in their growth and transformation journeys. We continue to make significant investments in differentiating digital capabilities that are helping us participate in key growth areas of our clients technology spend – be it their cloud transformation, data maturity or in advancing their automation agenda.”
He added,“Our products and platforms are seeing increased client adoption and market coverage. During the quarter, we launched a unified TCS BaNCS Asset Servicing platform for asset managers, broker-dealers and custodians and a comprehensive Site Feasibility Assessment platform within our Advanced Drug Development platform suite. Our diversified industry and geography presence, and largest Agile Ready workforce, together with our Machine First™ approach to continuous improvement and innovation augurs well for our future growth.”
V Ramakrishnan, Chief Financial Officer, said, “We have been gearing up for growth despite the volatility. Our margins in Q2 reflect our continued investments in our people, and in building the capacity we need to fulfill our strong order book.”
IFRS Financial Statements
Unaudited Condensed Consolidated Statements of Comprehensive Income
For the three-month periods ended September 30, 2018, and September 30, 2019
(In millions of $, except per share data)
|
Three-month period ended |
Three-month period ended |
Revenue |
5,215 |
5,517 |
Cost of revenue |
3,000 |
3,264 |
Gross margin |
2,215 |
2,253 |
SG & A expenses |
832 |
927 |
Operating income |
1,383 |
1,326 |
Other income (expense), net |
85 |
166 |
Income before income taxes |
1,468 |
1,492 |
Income taxes |
345 |
350 |
Income after income taxes |
1,123 |
1,142 |
Minority interest |
4 |
3 |
Net income |
1,119 |
1,139 |
Earnings per share in $ |
0.29 |
0.30 |
Unaudited Condensed Consolidated Statements of Financial Position
As of March 31, 2019, and September 30, 2019
(In millions of $)
|
As of March 31, 2019 |
As of September 30, 2019 |
ASSETS |
||
Property and equipment |
1,685 |
1,625 |
Right-of-use Assets |
0 |
898 |
Intangible assets and Goodwill |
581 |
573 |
Accounts Receivable |
3,969 |
3,918 |
Unbilled Revenues |
1,298 |
1,596 |
Investments |
4,243 |
4,332 |
Cash and Cash equivalents |
1,045 |
717 |
Other current assets |
2,908 |
3,475 |
Other non-current assets |
1,207 |
1,171 |
Total Assets |
16,936 |
18,305 |
LIABILITIES AND SHAREHOLDERS' EQUITY |
||
Shareholders' Funds |
13,243 |
13,737 |
Long term borrowings |
6 |
0 |
Short term borrowings |
3 |
0 |
Other current liabilities |
3,192 |
3,370 |
Other non-current liabilities |
423 |
1,122 |
Minority Interest |
69 |
76 |
Total Liabilities |
16,936 |
18,305 |
About Tata Consultancy Services Ltd (TCS)
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 the last fifty years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent Agile delivery model, recognized as a benchmark of excellence in software development.
A part of the Tata group, India's largest multinational business group, TCS has over 450,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $20.9 billion in the fiscal year ended March 31, 2019, and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India. TCS' proactive stance on climate change and award winning work with communities across the world have earned it a place in leading sustainability indices such as the Dow Jones Sustainability Index (DJSI), MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit us at www.tcs.com.
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