TCS (Tata Consultancy Services), India’s biggest IT services, consulting, and business solutions company declared its quarterly results for the financial year 2024-25 on October 10, 2024. TCS share price opened with a fall at ₹4,143 on October 11, 2024 from the previous close of ₹4,227.40. Since 2019, the company has reported a fall in September quarter operating margins for the first time. Let’s find out the IT major’s full TCS Q2 results report in this blog.
Key Highlights of the TCS Q2 Results FY25
1. Revenue at ₹64,259 crores, up 7.6% YoY
TCS has declared consolidated revenue of ₹64,259 crores for Q2 FY25 which is 7.6% higher than Q2 FY24 of ₹59,692 crores. At the same time, it is 2.63% higher than the previous quarter of Q1 FY25 at ₹62,613 crores.
2. Operating margin at 24.1%, down 0.2% YoY
The consolidated operating income for the TCS Q2 results FY25 is ₹15,465 crores, higher than the Q2 FY25 of ₹14,483 crores. Operating margin on the other hand has marked a fall of 0.2% on a YoY basis in Q2 FY25.
3. Net Income at ₹11,909 crores, up 5.0% YoY
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The consolidated net income or profit for TCS in Q2 FY25 is ₹11,909 crores higher than the Q2 FY24 profit of ₹11,342 crores. In Q1 FY24, the company made a net income of ₹12,040 crores, which means it fell by 1.08% QoQ. This is the first time in the last five years the company’s July-September quarter has registered a sequential fall from the last quarter.
In the TCS Q2 results segmental performance, the BFSI industry has the largest share, and its YoY growth in Q2 FY25 was 0.1%. The highest growth was registered in the Energy, Resources, and Utilities segment at 7% YoY in Q2 FY25, followed by manufacturing at 5.3%. The communication and media sector experienced the largest fall of 10.3% YoY in Q2 FY25.
Industry | Composition (%) | Y-o-Y Growth (%) Q2 FY 25 |
---|---|---|
BFSI | 30.8 | 0.1 |
Consumer Business | 15.1 | 0.1 |
Life Sciences & Healthcare | 10.4 | 0.1 |
Manufacturing | 8.6 | 5.3 |
Technology & Services | 8.0 | -1.9 |
Communication & Media | 5.9 | -10.3 |
Energy, Resources, and Utilities | 5.7 | 7 |
Regional Markets & Others | 15.5 | 50.4 |
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In the TCS market-wise performance, the highest share is held by North America which experienced a decline of 2.1% YoY in Q2 FY25. The major driving market is India with 95.2% YoY growth due to the execution of the BSNL deal. It is followed by the Middle East & Africa at a growth of 7.9%, Asia Pacific at 7.5%, and Latin America at 6.8%.
Geography | Composition (%) | Y-o-Y Growth (%) Q2 FY25 |
---|---|---|
North America | 47.6 | -2.1 |
Latin America | 1.8 | 6.8 |
UK | 17.0 | 4.6 |
Continental Europe | 14.6 | 1.8 |
Asia Pacific | 8.0 | 7.5 |
India | 8.9 | 95.2 |
Middle East & Africa | 2.1 | 7.9 |
TCS Q2 Results: Some Other Key Points
- Net Cash Flow from Operations at ₹11,932 crores, i.e., 100.2% of Net Income
- Workforce strength: 6,12,724 with the Net Headcount addition of 5,726 in Q2 FY25
- TCS Interim Dividend Declared: ₹10 per share. The Record date for the eligible shareholders is October 18, 2024, and the Payment Date is November 5, 2024.
- Clients of $100M+, up by 5 YoY
- Clients of $10M+, up by 8 YoY
- Clients of $1M+, up by 35 YoY
- Order Book TCV (Total Contract Value) at $8.6 billion, down 23.2% YoY and up 3.61% QoQ
- BFSI Revenue at ₹23,785 crores, up 4.14% YoY and up 3.08% QoQ
- Communication, Media, and Technology Revenue at ₹12,088 crores, up 26.28% YoY and up 11.99% QoQ
- Manufacturing Revenue at ₹6,310 crores, up 9.04% YoY and up 0.62% QoQ
TCS Q2 Results: Main Deals of the Quarter
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- TCS has entered into a five-year partnership agreement with the Sydney Marathon wherein it will enhance its usage of advanced technologies, sustainability, accessibility, and charitable impact.
- An extension of the partnership with Rolls-Royce to support the system and component design, supply chain, and research for hydrogen fuel system technology.
- ASDA has partnered with TCS to enhance its IT infrastructure and improve customer experience.
- The company has launched TCS Pace Studio in Stockholm, Sweden, and Manila, Philippines for digital innovations and enterprises can access exclusive latest technological advancements.
- Primark, a known name in the international fashion retail market, has signed a contract with TCS to transform its tech operations.
- The master franchise holder of McDonald’s in the Philippines has partnered with TCS to digitize its IT operations in more than 760 restaurants.
- UK’s largest telecom infrastructure company, Openreach, has partnered with TCS to transform its networks, minimize truck rolls, and shorten production cycles through GenAI and cloud innovations.
Conclusion
TCS has declared the interim dividend two times in this financial year with the previous one on July 19, 2024. Also, TCS Q2 results buyback highlights that in FY24 it has completed the buyback program of ₹17,000 crores. TCS revenue is growing but its margins are slightly falling which needs to be taken care of while investing in this stock. Keep exploring stocks and open demat account with SMC Global Securities. Stay tuned for more Nifty 50 companies’ quarterly results.
Reference
https://www.tcs.com/content/dam/tcs/investor-relations/financial-statements/2024-25/q2/IND%20AS/Press%20Release%20-%20INR.pdf
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