Software giants TCS and Infosys have published their June-quarter earnings. While Tata Consultancy Services’ (TCS) results beat analysts’ estimates on all parameters, Infosys’ numbers disappointed on the net profit front though its revenue and guidance met estimates.
A revival in both the core client segment and key operational geographies, along with some help from currency gains, helped India’s largest software exporter TCS to report a 6.8 percent sequential rise, and a 23 percent year-on-year jump, in June quarter net profit to Rs 7,340 crore.
TCS announced its first-quarter results after market hours on 10 July. It posted a smart rise, both in its revenue and net profit. No wonder TCS shares surged 5.5 percent the very next day, adding Rs 39,281.74 crore to its market valuation.
The stock jumped 5.47 percent and closed at Rs 1,979.60 on the BSE. On 11 July, the scrip climbed 6.28 percent to Rs 1,995 — its 52-week high.
“TCS first quarter results were better-than-expected on all fronts against our/street estimates,” Emkay Global Financial Services had said in a report.
The country’s second-largest software services major Infosys on Friday, 13 July, reported a 2.1 percent sequential decline, and a 3.7 percent on-year growth in consolidated net profit at Rs 3,612 crore for the quarter ended 30 June, 2018.
That compares with the Bloomberg consensus estimate of Rs 3,741 crore. Net profit was hit primarily by a Rs 270 crore reduction in the fair value of Panaya, the company said in a filing to the exchanges.
Infosys’ revenue has risen 5.8 percent sequentially and 12 percent on-year to Rs 19,128 crore in the June quarter. To keep investors happy, the company’s board has approved the issuance of one free share for every share held i.e. a 1:1 bonus issue.
Shares of Infosys on Friday rose by over two percent ahead of its June quarter results announcement. The IT major’s stock settled at Rs 1,309.10, up 1.12 percent on the BSE. Intra-day, it gained 2.83 percent to Rs 1,331.35. The company announced its quarterly results after the market closed on Friday.
Commenting on the Q1 performance, TCS CEO and MD Rajesh Gopinathan said: “We are starting the new fiscal year on a strong note, with the growth engine firing on all cylinders. Our Banking vertical recovered very nicely this quarter, while other industry verticals maintained their momentum. With a good set of wins during the quarter, a robust deal pipeline and accelerating digital demand, we are positioned well for the future.”
Mr Gopinathan further added: “Customers across verticals and markets are embracing our Business 4.0 thought leadership framework and accelerating their digital transformation journeys. Our contextual knowledge, full spectrum capabilities and investments in research and innovation are making us their preferred partner for their growth and transformation initiatives.”
Infosys’ CEO and MD Salil Parekh said in a statement,”The strong revenue and margin performance in this quarter shows that our dual emphasis on agile digital and AI (artificial intelligence) driven core services is resonating with our clients”.
He added that the company sees “good traction in the market”.