TCS opens 4 per cent lower, Q2 revenue below expectations

India's topmost IT company Tata Consultancy Services (TCS) has registered 5.8 per cent revenue growth on Q-o-Q basis to Rs 27,165 crore with volume and digital driving broadbased growth in Q2FY16. Dollar revenue increased by 3 per cent to USD 415.6 crore while the constant currency revenue rose by 3.9 per cent.

The EBITDA rose by 8.3 per cent to Rs 7792 crore compared to Rs 7195 crore, EBITDA margin expanded by 65 basis points to reach 28.68 per cent on a quarterly basis. The Operating profit rose by 8.7 per cent to Rs 7307 crore. TCS posted Rs 6055.2 crore of its consolidated net profit, increased by 6.4 per cent on a sequential basis. It was supposed to be higher but due to decrease in other income by 5.11 per cent and higher tax expenses of around Rs 1897 crore, it couldn't gain much.

Commenting on the Q2 performance, Chief Executive Officer and Managing Director, N Chandrasekaran said, “We have delivered accelerated growth in constant currency terms for Q2. Driven by great execution on the ground, our broad-based performance has been led by strong sequential growth in BFS, Retail and Life Sciences verticals with UK and North America leading the markets.”

During the quarter TCS's gross employee addition was 25,186, Its total headcount was 335,620, total utilization including trainees was 82.3 per cent. Also there was 9 new million dollar customers acquisition during the same quarter.

Growth was broad-based in Q2 with all industries growing on a sequential basis led by BFS, Retail, Life Sciences and Travel & Hospitality. The core markets like UK, North America and Europe grew smartly along with emerging markets like Latin America, India and MEA. There was balanced growth across service lines led by Asset Leveraged Solutions.

During the quarter ended Sept 2015 , the FII holdings decreased by 258 basis points to 14.37 per cent and DII holdings increased by 261 basis points to 7.3 per cent. Today TCS is trading around 4 per cent lower at Rs 2493.