Tata Consultancy Services (TCS), India's largest IT services company, reported a consolidated net profit of ₹12,075.00 crore for the second quarter, falling short of analyst expectations and marking a decline from the previous quarter. However, the company also reported its first constant currency revenue growth in three quarters.

Financial Performance

TCS's Q2 results show a mixed picture:

The company's revenue grew by 3.70% quarter-on-quarter, reaching ₹65,799.00 crore, exceeding analyst projections of ₹65,114.00 crore. However, the net profit declined by 5.37% compared to the previous quarter's ₹12,760.00 crore, and fell short of analyst estimates of ₹12,528.30 crore.

Key Highlights

• Constant currency revenue growth of 0.80% sequentially, marking the first growth after two quarters of decline.
• EBIT grew 6.80% sequentially to ₹16,565.00 crore, surpassing estimates of ₹16,103.00 crore.
• EBIT margins expanded by 70 basis points to 25.20% from 24.50% in the June quarter.
• TCS did not disclose its quarterly attrition rate and total headcount figures, departing from its customary practice.

Employee Data Omission

In a notable departure from its usual practice, TCS did not release employee workforce data, attrition rates, and employee metrics alongside its financial results in the official press release. This information has typically been a standard part of the company's earnings announcement format.

Market Response

TCS shares closed 1.10% higher at ₹3,060.00, continuing recovery from their 52-week low reached on October 1.

Outlook

While TCS has shown its first constant currency revenue growth in three quarters, the impact of global economic uncertainties may continue to pose challenges. The company's ability to maintain this growth trajectory and improve profitability will be closely watched by investors and industry analysts in the coming quarters.

As the IT services landscape evolves, TCS's performance in navigating these changes and maintaining its market leadership will remain a key focus for stakeholders. The omission of employee data in this quarter's results may also draw attention and raise questions about workforce trends within the company.

Tata Consultancy Services (TCS), India's largest IT services company, has announced the cancellation of its scheduled press conference for the second quarter earnings results. The decision comes as the originally planned date, October 9, coincides with the anniversary of Ratan Tata, the former chairman of Tata Group.

Key Points

• TCS will proceed with its analyst call as planned, where financial performance and management commentary will be shared.
• This marks the second consecutive year TCS has cancelled its Q2 press conference, following a similar decision last year after Ratan Tata's passing.
• The Q2 results are highly anticipated as they are expected to provide insights into global IT sector demand.

Market Implications

The cancellation of the press conference comes at a crucial time for the IT sector, with several factors influencing market sentiment:

1. US H1-B Visa Price Hikes: Recent increases in H1-B visa prices could impact IT companies' operational costs and strategies.
2. Recovery in Discretionary Spending: Investors are keenly watching for signs of recovery in discretionary spending from US and European markets.
3. Staffing Challenges: The company's approach to managing staffing issues in a competitive talent market remains a point of interest.
4. Cautious Client Spending: How TCS navigates the current environment of cautious client spending will be a key focus for analysts and investors.

While the press conference has been cancelled, the upcoming analyst call is expected to address these critical points and provide valuable insights into TCS's performance and outlook.

Significance of Q2 Results

The second quarter results of TCS are viewed as a significant indicator for the global IT sector. As one of the leading players in the industry, TCS's performance often sets the tone for the sector and provides clues about overall demand trends.

Investors and analysts will be paying close attention to the analyst call to gauge:

• The impact of global economic conditions on IT services demand
• TCS's strategies for growth in a challenging market
• Any shifts in client behavior or spending patterns
• The company's outlook for the remainder of the fiscal year

While the cancellation of the press conference may limit some immediate media exposure, the analyst call is expected to provide the necessary information for stakeholders to assess TCS's position and the broader IT sector outlook.