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TCS reports strong Q1 FY2025 results with 5.4% YoY revenue growth, robust operating margin, significant headcount addition, and key partnerships. Major growth seen in manufacturing, India market, and AI/cloud initiatives.
Tata Consultancy Services Limited (BSE: 532540, NSE: TCS) announced its Q1 FY2025 financial results on July 11, 2024. The company reported a solid start to the fiscal year, demonstrating broad-based growth across various markets and verticals. Below are the consolidated highlights for Q1:
Revenue: TCS reported revenue of ₹62,613 crore, marking a 5.4% year-on-year (YoY) growth and 4.4% growth in constant currency (CC).
Operating Margin: The operating margin stood at 24.7%, an expansion of 1.5% YoY.
Net Income: The net income for the quarter was ₹12,040 crore, indicating an 8.7% YoY growth, with a net margin of 19.2%.
Net Cash from Operations: The net cash from operations amounted to ₹11,168 crore, which is 92.8% of the net income.
Workforce Addition: The net headcount addition was 5,452, bringing the total workforce strength to 606,998. The long-term attrition rate further decreased to 12.1%.
Dividend per share: TCS announced a dividend of ₹ 10.00 per share. The Record date would be 20/07/2024 and the payment date would be 05/08/2024.
Metrics | Q1 FY2025 (₹ crore) | Q1 FY2024 (₹ crore) | Growth |
Revenue | 62613 | 59381 | 5% |
Profit Before Tax | 16231 | 14989 | 8% |
Profit After Tax | 12040 | 11074 | 9% |
Net Profit | 12105 | 11120 | 9% |
Growth by Industry Segments
Other verticals also showed sequential growth, contributing to the overall positive performance.
Growth by Markets
Key Growth Drivers:
Explore: Tata Consultancy Serv Lt Share Price
CEO and MD: K Krithivasan
K Krithivasan expressed his pleasure over the strong start to the fiscal year, highlighting the all-round growth across industries and markets. He emphasized TCS's continued expansion of client relationships, investments in emerging technologies, and innovation initiatives. Key projects included a new AI-focused TCS PacePort™ in France and an IoT lab in the US.
CFO: Samir Seksaria
Samir Seksaria highlighted the strong operating margin performance despite the annual wage increments. He attributed this success to TCS's focus on operational excellence and strategic investments in research, innovation, and talent.
Chief HR Officer: Milind Lakkad
Milind Lakkad discussed the successful completion of the annual increment process and the continued focus on employee engagement and development, resulting in industry-leading retention rates and strong business performance.
AI.Cloud and Cyber Security
AI.Cloud: TCS continued to see strong growth momentum, with over 270 AI/GenAI engagements in progress. The launch of TCS AI WisdomNext™ platform aggregates multiple GenAI services, facilitating rapid adoption of next-gen technologies.
Cyber Security: Saw strong growth, with clients prioritizing network security, identity and access management, and cloud security. TCS expanded its offerings and partnerships in these areas significantly.
Enterprise Solutions: Clients are investing in ERP modernization, supply chain optimization, and customer experience transformation, with GenAI being a major area of interest.
IoT & Digital Engineering: Growth driven by demand for digital transformation in connected plants, services, and industrial product engineering.
TCS saw strong bookings led by large deals, reflecting robust demand for business process and infrastructure services. Key themes included operating model transformation, digitization of business processes, and vendor consolidation.
Key Highlights and Partnerships
Awards and Recognition
TCS received numerous accolades in Q1 FY2025, including:
Metrics | Q1 FY2025 (₹ crore) | Q1 FY2024 (₹ crore) | Year ended March 31, 2024 (₹ crore) |
Revenue from operations | 62613 | 59381 | 240893 |
Other income | 962 | 1397 | 4422 |
Total income | 63575 | 60778 | 245315 |
Employee benefit expenses | 36416 | 35148 | 140131 |
Cost of equipment and software licences | 2151 | 506 | 3702 |
Finance costs | 173 | 163 | 778 |
Depreciation and amortisation expense | 1220 | 1243 | 4985 |
Other expenses | 7384 | 8729 | 32764 |
Total expenses | 47344 | 45789 | 182360 |
Profit before exceptional item and tax | 16231 | 14989 | 62955 |
Profit before tax | 16231 | 14989 | 61997 |
Current tax | 4290 | 3868 | 15864 |
Deferred tax | -164 | 1 | 34 |
Total tax expense | 4126 | 3869 | 15898 |
Profit for the period | 12105 | 11120 | 46099 |
Metrics | Q1 FY2025 | Q1 FY2024 | Year ended March 31, 2024 |
Earnings per equity share (Basic and diluted) | 33.28 | 30.26 | 125.88 |
Dividend per share (Interim dividend) | 10 | 9 | 45 |
Total dividend on equity shares | 10 | 9 | 73 |
Tata Consultancy Services Limited has showcased a strong start to FY2025, with significant growth across various markets and industry segments. The company's focus on innovation, client relationships, and operational excellence continues to drive its success. With ongoing investments in AI, IoT, and digital engineering, TCS is well-positioned to maintain its leadership in the IT services sector. The TCS Share Price closed today at Rs. 3,902.00 down by 0.18%.
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This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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