TCS Announces Second Interim Dividend. 5 Takeaways from TCS Q2 Results

India's largest IT company in terms of revenue Tata Consultancy Services (TCS) today post market hours, reported its results for the quarter ended September 2022.

In the previous quarter, the Tata group company had reported a marginal growth in net profit on a 16.2% growth in revenues. The company's IT services attrition was 19.7% in Q1.

TCS, being an FII favorite stock, has seen heavy selling pressure after Accenture's future forecast.

So, investors were eagerly waiting to see what India's largest IT company had to report as it will set the ground for other IT companies which are scheduled to report earnings later this week.

Among other things, attrition, deal wins, and margins were the key things watched out. How did TCS fare on these fronts?

Here are five takeaways from TCS' Q2 results.

• The company's net profit for the quarter under review rose by 8.3% to Rs 104.3 bn. This compared to Rs 96.2 bn in the year-ago quarter.
  
  Sequentially, profit rose 10% from Rs 94.8 bn in the June 2022 quarter.
  
  With this, TCS' net profit crossed the Rs 100 bn mark.
• Revenues for the quarter grew by 18% YoY to Rs 553.1 bn. Sequentially, revenues grew by 4.8%.
• Its operating margin for the quarter under review stood at 24%, a contraction of 1.6% YoY, whereas its net margin stood at 18.9%.
• The company's IT services attrition was 21.5% on the last twelve months basis. It added 9,840 employees during the quarter and total workforce strength now stands at 616,171.
• TCS' directors declared a second interim dividend of Rs 8 per equity share of Rs 1 each of the company. The company had declared Rs 8 per share in dividend in the first quarter too.
  
  The second interim dividend will be paid on 7 November 2022 and the record date for the same is 18 October 2022.

The company's peers Wipro and HCL Tech are scheduled to report their earnings later this week.

How has TCS performed on bourses recently?

Ahead of its results, TCS share price rose 2% in intraday trade today to Rs 3,129.9 against its previous close of Rs 3,064.95.

It opened the day on a negative note but recovered losses in early trade.

TCS has a 52-week high quote of Rs 4,045 touched on 18 January 2022 and a 52-week low quote of Rs 2,926 touched on 26 September 2022.

In 2022 so far, shares of the company have fallen 17%.

TCS share price is falling owing to the global tech stocks selloff, selling by FIIs and attrition concerns among other reasons.

However, despite the selloff, it continues to be one of the favourite stocks of investors because of the performance it has delivered since its listing.

Take a look at the chart below to see why TCS still makes it to investors' portfolio.

Here's a comparative analysis of TCS with its peers.

Comparative Analysis

Company	TCS	Infosys	Wipro	HCL Tech	Tech Mahindra
ROE (%)	44.1	29.4	20.5	22.2	22.1
ROCE (%)	60.2	40.0	21.8	26.6	26.5
Latest EPS (Rs)	106.0	52.9	21.1	50.0	54.9
TTM PE (x)	28.9	27.4	19.4	19.1	18.6
TTM Price to book (x)	11.4	7.6	3.3	4.0	3.6
Dividend yield (%)	1.4	2.1	1.5	4.4	4.4
Industry PE (x)	26.1
Industry PB (x)	6.7

Data Source: Equitymaster, Ace Equity

About TCS

TCS is the largest information technology (IT) services, consulting, and business solutions company in India.

It was the first company on the Bombay Stock Exchange (BSE) to reach US$ 100 bn market cap in 2018.

To know more about TCS, check out TCS's financial factsheet and its latest quarterly results.

You can also compare TCS with its peers.

TCS vs Infosys

TCS vs Tech Mahindra

For a more direct view, read our detailed editorials where we compare TCS vs Infosys and TCS vs Wipro.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...