The IT services major’s Q1 performance largely disappointed the street as the pandemic affected its revenues, profit, and operating margins harder than previously expected. Almost all the geographies and business verticals except life sciences and health care saw a decline in growth in the quarter. However, the company reported strong agreement wins, indicating a robust deal pipeline. The management maintained its previous commentary on coming back to the growth path from Q3 (October-December) stood as the Tata group company saw recovery in BFSI (banking, financial services, and insurance) and manufacturing from the current quarter onwards.
“The revenue impact of the pandemic played out broadly along the lines we had anticipated at the start of the quarter,” said Rajesh Gopinathan, chief executive officer and managing director.
“We believe it has bottomed out, and we should now start tracing our path to growth.”
In the quarter ended June, TCS reported profit before tax (PBT) of Rs 9,504 crore, which was 9.6 per cent lower than in the previous quarter and 10.65 per cent lower than the same period of the previous financial year. Net profit declined 13.81 per cent year-on-year (YoY) to Rs 7,008 crore for this period while sequentially it went down by 12.9 per cent. While revenues rose marginally in rupee terms, the decline was larger than what most market analysts expected in constant currency terms.
In Q1, consolidated revenues were higher by 0.39 per cent on a yearly basis at Rs 38,322 crore while they fell 4.1 per cent quarter-on-quarter.
