Consolidated sales rose 16.6 per cent sequentially (34 per cent year-on-year) to Rs. 20,977 crore, while profits rose 23.9 per cent sequentially to Rs. 4,702 crore for the second quarter ending September, TCS said.
US dollars sales, a measure of real demand, grew 5.4 per cent sequentially to $3337 million as against $3165 million in the June quarter.
“Strong volumes, currency tailwinds and firm execution helped up to post industry leading operating margins in this quarter,” CFO Rajesh Gopinathan said.
Operating margins surged to 30.2 per cent in the September quarter, above estimates of 29.4 per cent, aided by the sharp fall in the Indian rupee. Indian IT companies benefit from a weak rupee as they earn a majority of their revenues in foreign currency such as the US dollar.
TCS, part of the salt-to-steel Tata conglomerate, India’s biggest business house, does not give a revenue forecast, but expects to grow faster than the industry. That is typically taken to mean the industry lobby group National Association of Software and Services Companies’ outlook for exports growth, pegged at a 12-14 per cent this financial year.
Compare that to Infosys, which narrowed its annual revenue guidance forecast from 6-10 per cent to 9-10 per cent last week. Infosys had also reported a drop in operating margins citing wage hikes implemented in the September quarter.
Utilization rate (workforce efficiency), excluding trainees, stood at 83.4 per cent in the second quarter as compared to 82.7 per cent in the June quarter. The company won three $100 million plus deals in the quarter, taking the total number of such clients to 22.
Shares of TCS, India’s largest company by market value, which rose to a record on Monday on heightened expectations, ended up 0.1 per cent at 2215.40 rupees on Tuesday. TCS announced a dividend of Rs. 4 per share.
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