TCS Q1 PAT up 5.22% at Rs9,478cr as North America grows 19.1%

11 Jul 2022 , 07:44 PM

TCS reported 16.18% growth in total sales revenues for the June 2022 quarter on consolidated basis at Rs52,758cr. On a sequential basis, the revenues were up by 4.28%.

In terms of verticals contributing to revenues, BFSI contributed Rs20,244cr, CMT Rs8,848cr, Retail Rs8,832cr and Life sciences Rs5,667cr. Revenues grew by 15.5% in constant currency terms.

While UK and Europe growth faltered on recession fears, the top line growth in North America was 19.1% yoy. Retail led the practice growth at 25.1% in constant currency terms.

Order book accretion at $8.2 billion was lower sequentially. TCS added 9 clients in the $100 million plus category and 19 clients in the $50 million plus band.

For the June 2022 quarter, the consolidated operating profits were up 4.76% at Rs11,987cr, but the operating profits were lower on a sequential basis by -3.2%.

Higher employee costs, elevated travel costs and the pressure of attrition depressed the operating margins for the quarter. In fact, operating margins were nearly 248 bps lower on a yoy basis at 22.72%. However, the net cash from operations at Rs10,810 crore stood at 114% of revenues. One concerns was the spike in the attrition rate to an all time high at TCS of 19.7%.

The consolidated Profit after tax (PAT) for the June 2022 quarter was up 5.22% at Rs9,478cr on the back of higher revenue advantage getting neutralized by higher costs on the employee and attrition front. With a Q1 dividend pay-out of Rs.8 per share, the company looks set to reward shareholders with its huge cash chest.

Sequential revenues were negative in UK and EU region, which accounted for 30% of TCS overall revenues. PAT margins tapered to 17.97% in the Jun-22 quarter to 19.84% in the Mar-22 quarter. Even on a sequential basis, the net profit margins were lower by 165 basis points.

Financial highlights for Jun-22 compared yoy and sequentially

	TCS Ltd
Rs in Crore	Jun-22	Jun-21	YOY	Mar-22	QOQ
Total Income (Rs cr)	₹ 52,758	₹ 45,411	16.18%	₹ 50,591	4.28%
Operating Profit (Rs cr)	₹ 11,987	₹ 11,442	4.76%	₹ 12,383	-3.20%
Net Profit (Rs cr)	₹ 9,478	₹ 9,008	5.22%	₹ 9,926	-4.51%
Diluted EPS (Rs)	₹ 25.90	₹ 24.35		₹ 26.85
OPM	22.72%	25.20%		24.48%
Net Margins	17.97%	19.84%		19.62%