Tata Consultancy Services, the Indian IT behemoth, reported an 8.7 percent year-over-year increase in net profit for the June quarter on Thursday, aligning with analyst predictions and indicating heightened client expenditure. The Mumbai-based entity ranks as India's second-largest company by market capitalization and derives over 80 percent of its earnings from Western markets.
Post-pandemic, TCS experienced a dip in demand as clients reduced tech investments amid rising inflation and a volatile global economic climate. However, the firm anticipates improved performance in the forthcoming year, spurred by a global economic recovery and clients' readiness to invest in generative AI technologies.
The company's quarterly revenue surged 5.4 percent year-over-year to reach $7.49 billion (626.1 billion rupees), with net profit amounting to $1.44 billion for the same period. This performance was reinforced by a 9.4 percent year-over-year revenue increase in the manufacturing sector. In a statement, CEO K Krithivasan noted TCS's robust beginning to the new fiscal year, marked by comprehensive growth across industries and markets.
CFO Samir Seksaria highlighted the company's achievement of a strong operating margin despite increased payroll expenses due to annual wage adjustments in this quarter. TCS's domestic competitor, Infosys, is scheduled to release its quarterly results next week. TCS shares edged up 0.37 percent in Mumbai prior to the earnings disclosure.
