Tata Consultancy Services’ earnings increased 8.3% to Rs.10,465 crores in the second quarter of 2022-23, up from Rs.9,624 crore the previous year. “In terms of profitability, we crossed Rs.10,000 crore for the first time ever,” said TCS CEO Rajesh Gopinathan. Profit increased 10% sequentially from Rs. 9,478 crores in the first quarter of FY23. Revenue from operations increased 18% to Rs.55,309 crore in Q2, up from Rs. 46,867 crores in the preceding month. The IT major operational margin increased slightly to 24% in the second quarter, up from 23.1% in the previous quarter. TCS did not meet its target margin band of 25%, which the IT firm had usually met.
According to Sheksaria, the rupee’s depreciation and better operational efficiencies supported margin growth.
The order book for Q2FY23 was $8.1 billion, nearly the same as the $8.2 billion reported in the first quarter.
However, the IT major did not capture any landmark transactions this quarter. The entire deal value was $500 million, with the largest contract at around $400 million.
“We had a very robust quarter with significant demand resiliency.” “Our diversified portfolio, as well as our capacity to stay relevant,” Gopinathan explained. He said that the company’s supply-side issues have been essentially overcome. “…Europe is still waiting to see how its winter will be, so some softness can be expected in the BFSI sector and insurance (on the PnC side) in the case of North America,” said N Ganapathy Subramaniam, Chief Operating Officer.
Attrition in LTM IT services increased to 21.5% in Q2, up from 19.7% in the previous quarter. However, attrition has peaked, according to Milind Lakkad, Chief HRO, and will begin to decline progressively in the second half of FY23. According to him, TCS has already hired 35,000 freshers and plans to hire another 10,000-12,000 this year.
This quarter, the company announced 10,000 net additions.