In This Article:
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Revenue: INR64,259 crore, a year-over-year growth of 7.6%.
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Operating Margin: 24.1%, a sequential decline of 60 basis points.
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Net Margin: 18.5%.
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EPS Growth: 6.2% year-over-year.
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Net Cash from Operations: $1.4 billion, with a cash conversion of 100% of net income.
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Free Cash Flow: $1.3 billion.
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Interim Dividend: INR0.1 per share.
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Segment Performance: BFSI, Consumer Business Group, and Life Sciences & Healthcare grew 0.1%; Manufacturing grew 5.3%; Technology & Services declined 1.9%; Communication & Media declined 10.3%; Energy, Resources & Utilities grew 7%; Regional Markets grew 50.4%.
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Geographical Performance: India led with 95.2% growth; Middle East & Africa grew 7.9%; Asia Pacific grew 7.5%; Latin America grew 6.8%; UK grew 4.6%; Europe grew 1.8%; North America declined 2.1%.
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Total Contract Value (TCV): $8.6 billion; BFSI TCV at $4.6 billion; Consumer Business Group TCV at $1.2 billion; North America TCV at $4.4 billion.
Release Date: October 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Tata Consultancy Services Ltd (BOM:532540) reported a year-on-year revenue growth of 7.6% in INR terms for Q2 FY25.
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The company's operating margin for the quarter was 24.1%, with a net margin of 18.5%.
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The BFSI vertical showed signs of recovery, contributing positively to the company's performance.
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TCS's Ignio cognitive automation software suite saw 34 new deals and four go-lives, indicating strong demand for AI and automation solutions.
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The company reported a strong order book with a total contract value (TCV) of $8.6 billion for the quarter.
Negative Points
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North America experienced a revenue decline of 2.1%, impacting overall growth.
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The technology and services segment saw a decline of 1.9%, while communication and media declined by 10.3%.
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The operating margin declined sequentially by 60 basis points due to higher third-party expenses and investments in talent and infrastructure.
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The company faced client-specific challenges in the life sciences and healthcare sectors, impacting revenue.
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The demand environment remains cautious, with discretionary spending and deal closures experiencing delays.
Q & A Highlights
Q: Could you elaborate on the demand environment and whether it has deteriorated after a couple of promising quarters? A: The demand continues to focus on cost optimization, with discretionary spend remaining stable. BFSI in North America has shown improvement, and while there are client-specific challenges in life sciences and healthcare, the overall environment is similar to the previous quarter. - K. Krithivasan, CEO