TCS Results Announced: Share Price in Focus

Tata Consultancy Services (TCS) has announced its consolidated financial results for the quarter ending September 30, 2024 (Q2 FY25). The company reported revenues of ₹64,259 crore, reflecting a 7.6% year-on-year increase, and a 5.5% increase in constant currency. Operating margin stood at 24.1%, a slight decline of 0.2% YoY, while net income rose by 5.0% YoY to ₹11,909 crore, with a net margin of 18.5%.

Net cash from operations reached ₹11,932 crore, representing 100.2% of net income. TCS’s workforce comprised 612,724 employees, with a net headcount addition of 5,726. The company boasts a diverse and inclusive workplace, with women constituting 35.5% of its workforce and employees representing 150 nationalities. The attrition rate for IT services over the last twelve months was 12.3%.

Business Highlights

Services

Clients are focusing on initiatives to enhance customer acquisition, modernize their digital core—including ERP platforms—and improve enterprise observability, regulatory compliance, and security. While discretionary spending faced challenges, clients continued to invest in AI and GenAI, leading to improved outcomes. TCS is establishing interdisciplinary AI offices and Centers of Excellence (CoEs) to drive large-scale AI implementation. Key growth areas this quarter included Cyber Security, AI.Cloud, and TCS Interactive, with win themes across major deals encompassing vendor consolidation, managed services, UX transformation, technology simplification, and automation.

AI.Cloud

TCS is witnessing robust momentum in AI and GenAI adoption, with over 600 engagements deployed successfully. Clients are increasingly focused on integrating AI across their enterprise value chains rather than pursuing isolated use cases. TCS is enhancing AI capabilities across its products and solutions while deepening workforce skills through initiatives like AI Experience Zone and TCS WisdomNext™. The company also reports strong growth in legacy modernization, data platform upgrades, and technology landscape simplification.

Cyber Security

There is a notable increase in client spending on security enhancements. TCS’s offerings focused on establishing security guardrails for AI/GenAI adoption are gaining traction, particularly in areas such as Governance, Risk & Compliance (GRC), Vulnerability Management, Identity and Access Management, and Cloud Security. Additionally, there is growing interest in Security Operations transformation, ransomware resilience, and secure GenAI.

TCS Interactive

The interactive services sector continues to grow, with marketers prioritizing customer acquisition, retention, and product differentiation. This shift presents opportunities for TCS to help clients harness data for consumer insights, enhance customer experience (CX), create personalized content, and optimize adtech/martech for better ROI. Many clients are expanding the remit of their Chief Marketing Officers to include digital transformation, with improved spending observed this quarter.

IoT & Digital Engineering

Demand in IoT and Digital Engineering remains strong, driven by trends such as smart manufacturing, operational technology (OT) modernization, and sustainability. Key services experiencing traction include Manufacturing Execution Systems (MES), Industry 4.0 solutions, IoT platform services, and digital engineering. The adoption of IoT-driven transformations and Industrial AI (including Digital Twins) is increasing, particularly in the TSS and LSHCERU industry groups.

Enterprise Solutions

Clients continue to invest in ERP modernization, partnering with TCS for business and CX transformation solutions that include supply chain optimisation claims modernization, and sustainability efforts. GenAI has gained traction across various industries, with TCS’s transformation approach and industry-specific solutions—such as TCS Crystallus™—helping clients accelerate their growth and transformation journeys.

K Krithivasan, Chief Executive Officer and Managing Director said: “We saw the cautious trends of the last few quarters continue to play out in this quarter as well. Amidst an uncertain geopolitical situation, our biggest vertical, BFSI showed signs of recovery. We also saw a strong performance in our Growth Markets. We stay focused on sharpening our value proposition to our clients, employees and other stakeholders”.

On October 11, 2024, TCS shares opened at ₹4,140.00 and touched the day high of ₹4,220.95 at 09:25 AM.

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