TCS Q2 FY25 profit dips to ₹11,909 crore, misses estimates
What's the story
India's top IT service giant Tata Consultancy Services (TCS) has posted a marginal decline in its net profit for the second quarter of FY25. The company's net profit declined by 1.1% quarter-on-quarter (QoQ) to ₹11,909 crore, missing market estimates. Meanwhile, TCS's revenue from operations for Q2 FY25 rose to ₹64,259 crore, according to the stock exchange filing.
Dividend declaration
TCS announces interim dividend amid profit dip
Despite the minor drop in net profit, TCS has announced a second interim dividend of ₹10 per share. The shareholders' eligibility for this corporate action will be decided on Friday, October 18. This comes after an earlier interim dividend of ₹10 per share paid by the company on July 19, 2024. The announcement comes as part of the company's financial disclosures for Q2 FY25.
Sectoral impact
Revenue growth and market performance
TCS's revenue growth for Q2 FY25 was largely driven by the Energy, Resources and Utilities sectors. The company's largest vertical, BFSI (Banking, Financial Services and Insurance), showed signs of recovery amid geopolitical uncertainties. "We saw the cautious trends of the last few quarters continue to play out in this quarter as well," said K Krithivasan, CEO and Managing Director of TCS.
Financial performance
TCS's operating margin and workforce expansion
TCS's operating margin for Q2 FY25 was at 24.1%, a tad lower than the last quarter's 24.7%. The net margin was recorded at 18.5%. Despite these financial shifts, the company managed to add a net total of 5,726 employees during this quarter. This expansion comes as part of TCS's ongoing growth strategy in the IT sector.
Market trends
TCS's share performance and dividend history
Ahead of the Q2 FY25 results, TCS's share price fell slightly by 0.6% to close at ₹4,227.9 on the National Stock Exchange (NSE). In FY24, the company paid a total dividend payout of ₹46,223 crore to its shareholders. This comprised a final dividend of ₹28 per share for the fiscal year and interim dividends of ₹9 per share in the first and second quarters.