Tata Consultancy Services (TCS) Q1 24/25 (Media) earnings summary

Executive summary

• Revenue reached INR 62,613 crore ($7.51 billion), up 5.4% YoY in INR, 3.9% YoY in USD, and 4.4% in constant currency.

• Operating margin improved to 24.7%, with net profit at INR 12,038 crore ($1.44 billion) and net margin at 19.2%.

• Order book TCV was $8.3 billion, with North America at $4.6 billion and BFSI at $2.7 billion.

• Client metrics improved: $100M+ clients up by 3, $1M+ clients up by 42 YoY, and total headcount at 606,998 with attrition at 12.1%.

• EPS increased 9.9% YoY to INR 33.28 ($0.40).

Financial highlights

• Operating income rose to INR 15,442 crore ($1.85 billion), with gross margin at 39.8% and net income at INR 12,040 crore ($1.44 billion).

• Cash from operations was INR 11,168 crore ($1.34 billion), representing 92.8% conversion of net profit.

• Free cash flow was INR 102,930 Mn; total cash and investments stood at INR 466,470 Mn.

• Dividend of INR 10 per share declared.

• Total assets increased to $18.2 billion as of June 30, 2024.

Outlook and guidance

• Management expects FY25 to be better than FY24 but remains cautious due to market uncertainty, competition, wage inflation, and currency fluctuations.

• Operating margin is expected to improve through productivity and operational levers, targeting the 26-28% aspirational band.

• Attrition is expected to remain around 12% in the coming quarters.