TCS : Staff headcount is responsible for the highest quarterly net addition
Tata Consultancy Services (TCS) announced Thursday a 28.5 percent increase in net profit to Rs9,000.8 million in the first quarter. This is compared to Rs7.008 crore in last year’s same period. However, sequentially, the profit decreased by 2.5 percent compared to Q4 FY21’s Rs9,246 million.
From Rs38,920 crore last year, the company’s consolidated revenues from operations increased to Rs46.132 crore in its first quarter.
Rajesh Gopinathan (CEO and Managing Director) stated that the company saw strong growth in its core verticals and markets, but there were difficulties in emerging markets, led by India. We didn’t anticipate the viciousness that would follow the second wave, particularly in India. However, June saw some stabilisation so we will be rebounding in the second quarter.” The company declared an interim Dividend of Rs7 per equity shares.
The operating margin of the company was 25.5 percent in Q1 FY22, compared to 26.8 percent in Q4 FY21.
Chief Financial Officer Samir Seksaria explained that while the margins fell due to salary increases, some of it was offset with currency gains. Seksaria said that overall, it should be possible to maintain our margin in line our aspirational band (26-28%), ” Seksaria concluded.
The company hired and now has surpassed the 5-lakh mark in headcount. Total headcount is 509,058. The company saw a record-breaking Q1 net addition of 20,409 employees, an all-time high. However, attrition was high at 8 percent. The pandemic caused artificial attrition. It is part of our operating model. Milind Lakkad (TCS Chief Human Resource Officer) said that she doesn’t think it will have any significant impact on the company.
All verticals saw good YoY and sequential growth. Life Sciences and Healthcare continued to lead growth. Retail and Consumer Packaged Goods saw double-digit growth. As usual, North America led growth. The second wave of Covid saw sequential growth, which was down 14.1 percent q-o–q.
We reached the milestone of $6 billion in revenue for this quarter. We also had an annual salary rise and promotions. In addition, we conducted one of the largest private sector vaccination drives. This is a reflection of the inherent resilience our business model.