Tata group stock announces Q1FY24 results: Net profit surged more than 16 per cent; declares dividend!
The company's order book for Q1FY24 reached Rs 1020 crore, with a book-to-bill ratio of 1.4.
Tata Consultancy Services (TCS) is a leading IT services and consulting company, part of the Tata group. With over 50 years of experience, TCS offers a comprehensive portfolio of business, technology, and engineering services to global enterprises.
Today, Tata Consultancy Services (TCS) announced financial performance for the quarter ended June 30, 2023. Despite a challenging business environment, the company's net profit reached Rs 11,074 crore, marking an impressive 16.8 per cent year-on-year growth. This growth was primarily driven by a significant increase in total contract value (TCV) deal wins.
The consolidated revenue for the quarter reached Rs 59,381 crore, representing a YoY surge of 13 per cent.
The operating margin or EBIT margin declined from 24.49 percent in the previous quarter to 23.2 percent. This decrease can be attributed to the wage hikes that were implemented by the company on April 1.
The company's order book for Q1FY24 reached Rs 1020 crore, with a book-to-bill ratio of 1.4, slightly higher than the previous quarter's order of Rs 1000 crore.
The company revealed robust growth across various sectors, with the UK leading the way with a remarkable 16.1 per cent increase. The Life Sciences and Healthcare sector followed closely with 10.1 per cent growth, while Manufacturing recorded a solid 9.4 per cent expansion
These financial results align with the subdued expectations set by analysts in light of a weak demand environment. Sequentially, TCS experienced a modest growth of 0.4 per cent, which marks its slowest growth in the past 12 quarters. However, the net profit declined by 3 percent compared to the March quarter.
A token of happiness for shareholders, as the company announces the approval of an interim dividend of Rs 9 per share.
"We remain confident in the longer-term demand for our services, driven by the emergence of newer technologies. We are investing early in building capabilities at scale on these new technologies, and in research and innovation," TCS chief executive officer K Krithivasan said.
"We are proactively building differentiating capabilities in generative AI and actively working on such projects with our clients, delivering impact on technology, operations and client experience dimensions," added N Ganapathy Subramaniam, chief operating officer, TCS.
Looking at the past performance, the company has maintained a strong track record of return on equity (ROE) with a three-year average of 43.3 per cent. The company also maintains a healthy return on capital employed (ROCE) of 59.1 per cent. Additionally, TCS has consistently provided a dividend payout of 61.4 per cent, indicating its commitment to rewarding shareholders.
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On July 12, 2023, the shares of Tata Consultancy Services (TCS) plunged 0.36 per cent, the 52-week high and low are Rs 3,575.00 per share and Rs 2,926.00 per share, respectively on BSE. The current market-capitalisation is Rs 11,92,923.93 crore, its also known as blue chip stock.
Investors to keep close eye on this trending stock.