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The Hindu
5 days ago
- Business
- The Hindu
TCS Q1 net profit rises 6% to ₹12,760 crore; board declares interim dividend of ₹11 per share
In the backdrop of global uncertainties and geopolitical issues impacting businesses, Tata Consultancy Services Ltd. (TCS) reported 6% growth in net profit at ₹12,760 crore over the year ago period aided by one time gain of ₹600 crore for the first quarter of 2025-26 ending June 30. Revenue at ₹63,437 crore for the quarter, grew 1.3% Year on Year (YoY). However, the revenue declined 3.1% YoY in constant currency. Operating margin at 24.5% has seen an expansion of 30 bps quarter on quarter (QoQ). The net margin during the quarter was 20.1% . Net cash from operations at ₹12,804 crore was 100.3% of the net income during the quarter. The board has announced an interim dividend of ₹11 per share. Record date of dividend is July 16 and payment date is August 4. K. Krithivasan, Chief Executive Officer and Managing Director of TCS, said: 'The continued global macro-economic and geo-political uncertainties caused a demand contraction. On the positive side, all the new services grew well. We saw robust deal closures this quarter. We remain closely connected to our customers to help them navigate the challenges impacting their business, through cost optimization, vendor consolidation and AI-led business transformation'. Aarthi Subramanian, Executive Director - President and Chief Operating Officer who addressed the TCS press conference for the first time after joining during the last quarter, said: 'Across industries, clients are increasingly shifting their focus from using case-based approach to ROI-led scaling of AI. We are investing across the AI ecosystem, including infrastructure, data platform solutions, AI agents and business applications. Launching TCS SovereignSecureTM Cloud, TCS DigiBOLTTM, and TCS Cyber Defense Suite, to accelerate India's AI led transformation was a particular highlight of this quarter,' she said. Due to the uncertainties in business environment, the company has not announced any wage increase neither indicated any time frame in the near future. However, it said wage increase should be announced during the year. It has not quantified as to how many freshers would be onboarded this year but said it would honour all the job offers it had made on the campuses. As at the end of first quarter this fiscal, the company's workforce stands at 6,13,069. Net head count during the quarter increased by 6,071. The LTM IT Services attrition rate was at 13.8%. Milind Lakkad, Chief HR Officer, said: 'Talent development is core to TCS. In this quarter, our associates invested 15 million hours in building expertise in emerging technologies, enabling them to lead the transformation journey for our customer. It is gratifying to note that TCS now has 1,14,000 people with higher order AI skills,' he added. The company said it was confident of improvements in it's performance during this financial year. Samir Seksaria, Chief Financial Officer, said: 'We continued our investments in long-term sustainable growth this quarter. We stayed agile and adapted to the dynamic environment, delivering steady margins. Our industry leading profitability alongside robust cash conversion, positions us well to make strategic investments for the future'. During the quarter, industry-wise BFSI grew 1%, consumer de-grew 3%, life science de-grew 9.6%, manufacturing de-grew 4%, Technology Services grew 1.8%, Communications & media de-grew 9.6%, energy resources grew 2.8%, and regional markets de-grew 8.6% indicating the headwind faced by businesses. Region-wise, the company's North America business de-grew 2.7%, Latin America was up 3.5%, U.K. was down 1.3%, Continental Europe down 3.1%, Asia Pacific grew 3.6%, and India business was down 21.7% due to the impact of the completion of the BSNL contract and MEA grew 9.4%.
Business Standard
21-04-2025
- Business
- Business Standard
Infosys rises after Q4 PAT gains 3% QoQ to Rs 7,038 cr; declares dividend of Rs 22/sh
Infosys rose 1.92% to Rs 1,447.40 after the IT major reported 3.16% rise in consolidated net profit to Rs 7,038 crore in Q4 FY25 as against Rs 6,822 crore in Q3 FY25. However, revenue from operations decreased 2% QoQ to Rs 40,925 crore in the quarter ended 31 March 2025. On a year-on-year basis, the companys net profit fell by 11.74%, despite a 7.91% increase in revenue in Q4 FY25 over Q4 FY24. Profit before tax (PBT) decreased marginally to Rs 9,663 crore in Q4 FY25, compared to Rs 9,670 crore in Q3 FY25. On a year-on-year basis, PBT declined by 5.63% in Q4 FY25. Operating profit in the fourth quarter of FY25 was at Rs 8,575 crore, down 3.78% QoQ and up 12.51% YoY. Operating margin declined to 21% in Q4 FY25, compared to 21.3% in Q3 FY25 and 20.1% in Q4 FY24. During Q4 FY25, constant currency (CC) revenue grew by 4.8% YoY and declined 3.5% QoQ. In dollar terms, the IT firm reported revenues of $4,730 million, registering a 3.6% year-on-year growth for the quarter ended 31 March 2025. In Q4 FY25, free cash flow stood at $892 million, registering the growth of 5.2% year on year. The total contract value (TCV) of large deal wins was $11.6 billion in Q4 of FY25, with a net new of 56%. The companys total clients stood at 1,869 as on 31 March 2025 as compared with 1,882 clients as on 31 March 2024. On a full-year basis, the companys consolidated net profit rose 1.91% to Rs 26,750 crore on a 6.06% increase in revenue to Rs 1,62,990 crore in FY25 over FY24. The company reported its highest-ever free cash flow at $4,088 million in FY25, marking a 41.8% YoY increase. In terms of FY26 guidance, the company has projected revenue growth of 0%-3% in constant currency and an operating margin of 20%-22%. The IT major has informed that the voluntary attrition rate (LTM IT Services) came in at 14.1% in Q4FY25, up from 13.7% in Q3FY25 and 12.6% in Q4FY24. Meanwhile, the companys board declared final dividend of Rs 22 per share for FY25. Salil Parekh, CEO and MD, said, We have built a resilient organization with sharp focus on client-centricity and responsiveness to the market, thanks to the trust of our clients and dedication of our employees. Our performance for the year has been robust in terms of revenues, expansion in operating margins and highest ever free cash generation. Our depth in AI, cloud and digital and strength in cost efficiency, automation, and consolidation position us well for the needs of our clients. Jayesh Sanghrajka, CFO, said, "FY25 operating margins expanded by 0.5% which reflects our relentless focus on identifying opportunities for efficiency and executing Project Maximus with discipline, after navigating through multiple headwinds in a challenging macro environment. We delivered the highest ever free cash flows in the history of the company in FY25. The Board has proposed a final dividend of Rs 22, which along with the interim dividend, is an increase of 13.2% over last year. Separately, the companys wholly owned subsidiary, Infosys Nova Holdings LLC signed a definitive agreement to acquire MRE Consulting, a technology and business consulting service provider, for total consideration upto $36 million, including upfront and earnouts. The acquisition is expected to close during the first quarter of fiscal year 2026. MRE Consulting will bring a team of over 200 professionals with industry knowledge, consulting and deep technology experience in Energy/Commodity Trading and Risk Management (E/CTRM) platforms and ecosystems. To consummate the above transaction, Infosys Nova Holdings LLC will simultaneously incorporate a wholly owned subsidiary, Infosys Energy Consulting Services LLC. (Infosys Energy), in USA. Further, the companys wholly owned subsidiary, Infosys Singapore signed a definitive agreement to acquire 100% stake in The Missing Link, a leading cyber security services provider. The company will acquire The Missing Link for total consideration of upto AUD 98 million, including upfront and earnouts, excluding management incentives, and retention bonus. Headquartered in Australia, The Missing Link brings to Infosys, a group of highly skilled cybersecurity professionals consisting of Red Team, Blue Team, and a state-of-the-art Global Security Operations Centre (GSOC) adding to the network of Infosys global cyber defense centers. The acquisition is expected to close during the first quarter of fiscal 2026, subject to customary closing conditions. Additionally, the company announced that Mitsubishi Heavy Industries (MHI) has invested in the Infosys-led joint venture HIPUS, enhancing Infosys presence in Japan. HIPUS Co., a joint venture (JV) between Infosys Singapore, Hitachi, Panasonic and Pasona. Mitsubishi has been a longstanding customer of HIPUS and has now expanded the collaboration by acquiring a 2% stake from Infosys Singapore in the joint venture. MHI is one of the worlds leading industrial groups, spanning energy, smart infrastructure, industrial machinery, aerospace and defense, and has established corporations like Hitachi Ltd., Panasonic Corporation and Pasona. Infosys is a global leader in next-generation digital services and consulting.
