TCS posts robust revenue, net growth in Q2

Q2FY18 What do analysts expect from TCS

The Tata Consultancy Services headquarters

TCS posted a net profit of 64.46 billion rupees ($990 million) in the three months to September 30, beating analysts' average estimate of 63.06 billion rupees, Thomson Reuters data showed.

Shares of TCS today rose by over 2 per cent even as the company's net profit fell in the September quarter.

Revenue for the September 2017 quarter rose 4.3 per cent to Rs 30,541 crore as against Rs 29,284 crore in the same period of previous year.

India's largest software services exporter, Tata Consultancy Services (TCS) on Thursday reported a net profit of Rs 6,446 crore for the three months to September, an increase of 8.4% quarter-on quarter, beating analysts' estimates. Its revenue grew 4.3 per cent year-on-year and 3.2 per cent over the preceding June quarter to Rs 30,541 crore under the Ind AS accounting norms.

Commenting on the Q2 performance, Rajesh Gopinathan, CEO and MD, said, "We experienced robust volume growth in Q2, driven by good demand across multiple industry verticals".

While the growth momentum in the second quarter was strong, the constant currency revenue grew at a slower pace of 1.7 per cent sequentially compared with the reported pace of growth.

"We continue to gain share in the fast growing Digital spend of our customers, evident in our industry-leading Digital growth in Q2", Mr Gopinathan said.

Tata Consultancy Services (TCS) today said it has set aside Rs. 2,745 crore (USD 420 million) as contingent liability following the reduced damages pronounced by a U.S. court in its legal tussle with Epic Systems Corporation.

All segments of the business, except the banking, financial services and insurance (BFSI) and retail sectors, grew revenue above 9.5 percent.

TCS Chief Operating Officer N. Ganapathy Subramaniam said headwinds across sectors are slowly abating. BFSI accounts for more than 30 percent of TCS' revenues, while retail makes up about 13 percent. "We expect stronger and steadier growth ahead". TCS shares have returned a respectable 7% since january, at a time when the BSE IT Index has given abysmal 1.4% in the same period.

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