This is why TCS net profit jumped 23%

TCS CEO and MD Rajesh Gopinathan said he is enthused by the rising demand from BFSI clients and sees the “green shoots developing nicely” to make him confident of sustaining the momentum and “positive in the medium-term”.

TCS achieved a 9.3% revenue growth in constant currency terms and Gopinathan said they will try to meet the objective of double-digit revenue growth for the full fiscal. Image source: Reuters

Revival in both the core client segment and key operational geographies, along with some help from the currency gains, aided largest software exporter Tata Consultancy Services (TCS) to report 23% jump in June quarter net at Rs 7,340 crore.

The Tata Group flagship said its total income clipped at 15.8% to Rs 34,261 crore under the new accounting standards. The emerging digital segment saw a massive 44% spike in revenue compared to the preceding quarter and now contributes a fourth of the total income.

Revenue from clients in the banking, financial services and insurance sectors grew 4.1% on constant currency basis as against the preceding three months - the fastest growth in the past 15 quarters - leading to a shift in the management commentary on growth expectations.

TCS CEO and MD Rajesh Gopinathan said he is enthused by the rising demand from BFSI clients and sees the “green shoots developing nicely” to make him confident of sustaining the momentum and “positive in the medium-term”.

Despite all the protestations by the Donald Trump Administration, North America led by the US, which is its largest operational and income geography netting over 65% of sales, also picked up steam with a 7% revenue growth in constant currency terms and Gopinathan said he is confident of it picking up further during the fiscal year.

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Among other geographies, TCS revenues from the UK grew 18.7%, continental Europe (18.6%) and Asia Pacific (10.8%). From a sectoral perspective, energy was the fastest growing at 30.9%, while retail came at 10.9%.

The company achieved a 9.3% revenue growth in constant currency terms and Gopinathan said they will try to meet the objective of double-digit revenue growth for the full fiscal, which is a notch above the industry lobby Nasscom’s annual target.

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