Tcs Records Strong Double Digit Growth In First Quarter | Bengaluru News – Times of India

BENGALURU: TCS’s June quarter results and commentary, like Accenture’s two weeks ago, underscore strong demand trends. In constant currency, TCS’s revenue grew 3.5% sequentially and 15.5% year-on-year. In dollar terms revenue was up 10.2% year-on-year to $6.7 billion in the quarter.
Revenue growth was led by North America and was broad-based across industry verticals. The retail segment bounced back from the pandemic lows with strong growth of 25.1% year-on-year in constant currency.

“This has been a quarter of strong and steady performance, continuing our journey from last year and the last few quarters. As we look into our client universe and client discussions, we see a steady demand as reflected in our pipeline and deal closures,” said TCS CEO & MD Rajesh Gopinathan. TCS’s deal bookings (total contract value) was at $8.2 billion in the quarter, down 27.4% sequentially and up 1.2% year-on-year. There were a couple of deals in the $400-billion-plus range. Growth was led by cloud, consulting and consolidation of deals.
“Client conversations indicate that demand drivers will be the key themes we have been talking about, primarily cloud transition as well as investments in customer experience and operating model transformation initiatives, both on the growth and transformation side and cost and optimisation side,” Gopinathan added. Responding to questions about recessionary concerns and its impact on tech spending, Gopinathan reiterated that there are no indications of demand slowing down immediately. TCS’s growth was led by retail and CPG (consumer packaged goods), followed by communication and media, manufacturing and BFSI that grew 25.1%, 19.6%,16.4% and 13.9% year-on-year in constant currency respectively.
However, operating margin, at 23.1%, was below street expectations. This was a 190 basis points down sequentially and 240 basis points lower than a year-ago, partly due to wage hikes. TCS CFO Samir Seksaria said the dollar strengthened against most of the currencies, because of which the company had a 25 basis point positive impact on the margins.
Mitul Shah, head of research at Reliance Securities, said, “TCS is likely to be one of the key beneficiaries of medium-term uptrend in technology spending. We expect TCS to gain market share on the back of vendor consolidation and captive monetisation efforts. However, moderation in EBIT margins and lower order book would reduce the pace of earnings growth going ahead and may lead to downward revision to valuation multiple.” TCS has declared an interim dividend of Rs 8 per share.