TCS reported lower-than-expected numbers for Q2FY20. The company's INR revenue grew by 2.1% qoq and 5.8% yoy to Rs38,977cr, lower than consensus estimates of Rs39,371cr. Constant currency (cc) revenue grew by 8.4% yoy and dollar revenue came in at $5,571mn (+0.6% qoq and +5.8% yoy). EBIT stood at Rs9,361cr, up 1.5% qoq but down 4.2% yoy against the consensus estimate of Rs9,922cr. EBIT margin contracted by 14bps qoq and 250bps yoy to 24%. PAT declined by 1.1% qoq but grew by 1.8% yoy to Rs8,042cr against consensus estimates of Rs8,266cr.
Digital revenue grew by 27.9% yoy cc and now accounts for 33.2% of overall revenues.
Revenue growth was led by Life Sciences & Healthcare (+16% yoy cc) and Communications & Media (+11.8% yoy cc).
BFSI (+8% yoy cc), Manufacturing (+7.8% yoy cc), Technology & Services (+5.6% yoy cc) and Retail & CPG (+4.8% yoy cc) – continued to grow. Banking and retail growth was witnessed despite increased volatility in the above verticals.
Amongst geographies, growth was led by Europe (+16% yoy cc) and UK (+13.3% yoy cc). North America grew at 5.3% yoy cc, Asia pacific grew by 6.5% yoy cc, while Emerging markets were up 7-8% yoy cc.
The attrition rate stood at 11.6%.
The management remains confident as the medium- and longer-term demand for its services continues to be very strong, evidenced by the company's Q2 order book.
The Q2 order book is the largest in the last six quarters.
Tata Consultancy Services Ltd is currently trading at Rs. 2,009.55, down by 11.1 points or 0.55% from its previous closing of Rs. 2,020.65 on the BSE.
The scrip opened at Rs. 2,028 and has touched a high and low of Rs. 2,039 and Rs. 1,998.85 respectively. So far 23,65,364 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 100 DMA.
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