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4 things to know about TCS results
Publish date: 12th July
Tata Consultancy Services (TCS), India’s biggest Information Technology (IT) company reported their results for the June quarter of FY19. Here is everything you need to know.
1) Excellent start to FY19
TCS begins the year with a bang; displaying excellent results for the first quarter of FY19. The company reported a revenue growth of almost 16% to Rs 34,261 crore during the quarter. Being India’s biggest software services exporter, this comes at a time when the rupee depreciated around 5% against the US dollar. The company’s shares hit a record high of Rs 1,995 (6% rise) following the results on Wednesday.
2) Robust BFSI growth
The company posted a 23% jump in profits to Rs 7,340 crore during the quarter, surprising both investors and analysts alike. This was propelled by a robust growth in the Banking, Financial Services and Insurance (BFSI) and digital verticals of the company. After a poor performance in the past several quarters, the BFSI segment posted a sequential growth of 3.7% for the June quarter.
3) 10% growth in FY19
TCS registered a constant currency revenue growth of 4.1% in the first quarter. Generally, software vendors experience a strong first quarter in the fiscal year. But the result this year has been extra special since this is the highest revenue growth in constant currency terms since it posted a 5.5% growth in June 2014. The company is expected to achieve a revenue growth of 10% in FY19 according to Kotak Institutional Equities.
Companies that have significant international operations use constant currencies to eliminate the effects of exchange rate fluctuations when they calculate the company’s financial performance.
4) Impact of large deals
The company had signed up a number of large contracts over the last four quarters. And according to the company’s top management, these contracts have started contributing towards the company’s revenues. You can read about Intellectual Property (IP) deals in the Indian IT sector here.
Conclusion
The good performance has only begun according to market experts. The company has already bagged deals greater than$1 billion in the BFSI segment alone during the quarter. With a strong deal pipeline and accelerating demand in the digital segment, the company seems poised for a good run in FY19.
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