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TCS: A Good Operating Performance - Views on News from Equitymaster
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TCS: A Good Operating Performance
Oct 12, 2017 | Updated on Oct 13, 2017

India's largest software firm, Tata Consultancy Services (TCS) has announced its financial results for 2QFY18. The company has reported a 3.2% QoQ increase in consolidated sales while the consolidated net profit was up 8.4% QoQ.

Performance Summary
  • Consolidated sales increased by 3.2% QoQ in 2QFY18. Volumes were also up 3.2% QoQ.
  • The operating performance was good. The operating margin increased from 25% in 1QFY18 to 26.7% 2QFY18. The operating profit increased by 10.5% QoQ.
  • The net profit for the quarter came in at Rs 64,460 million, up 8.4% QoQ.
  • The company has declared the second interim dividend of Rs 7 per share. The record date and payment date for the same are 26 October 2017 and 1 November 2017 respectively.

    Consolidated Financials
    (Rs m) 1QFY18 2QFY18 Change 1HFY17 1HFY18 Change
    Sales 295,840 305,410 3.2% 585,890 601,250 2.6%
    Expenditure 221,980 223,770 0.8% 435,264 454,507 4.4%
    Operating profit (EBITDA) 73,860 81,640 10.5% 150,626 146,743 -2.6%
    Operating profit margin (%) 25.0% 26.7%   25.7% 24.4%  
    Other income 9,590 8,190 -14.6% 20,320 17,780 -12.5%
    Finance Costs 270 70 -74.1% 170 340 100.0%
    Depreciation & amortisation 4,990 5,040 1.0% 986 1,003 1.7%
    Profit before tax 78,460 84,720 8.0% 169,790 163,180 -3.9%
    Tax 18,960 20,120 6.1% 40,580 39,080 -3.7%
    Profit after tax 59,500 64,600 8.6% 129,210 124,100 -4.0%
    Minority Interest 50 140 180.0% 180 190 5.6%
    Net Profit 59,450 64,460 8.4% 129,030 123,910 -4.0%
    Net profit margin (%) 20.1% 21.1%   22.0% 20.6%  
    No. of shares         1,914.3  
    Diluted earnings per share (Rs)*         134.7  
    P/E ratio (x)*         18.9  

    *On a trailing 12 months basis


    Segmental Performance
    (Rs m) 1QFY18 2QFY18 Change
    On the basis of industry verticals      
    BFSI 97,331 100,785 3.5%
    Retail & CPG 36,092 36,344 0.7%
    Communications & Media 21,596 22,295 3.2%
    Manufacturing 22,188 22,906 3.2%
    Life Sciences & Healthcare 21,005 21,990 4.7%
    Energy & Utilities 11,834 12,827 8.4%
    Travel & Hospitality 10,354 11,606 12.1%
    Technology & Services 23,371 24,738 5.8%
    Regional Markets & Others 52,068 51,920 -0.3%
    On the basis of geography      
    North America 155,316 158,508 2.1%
    Latin America 6,213 6,719 8.2%
    UK 41,122 42,757 4.0%
    Continental Europe 36,980 40,925 10.7%
    India 20,709 19,241 -7.1%
    Asia Pacific 28,105 29,930 6.5%
    MEA 7,396 7,330 -0.9%
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