Tata Consulting reports $923m profit in Q1 2017

Tata Consulting acquired 22 new clients in the quarter, two of which were in the $50 million-plus and $100 million-plus bands.

Indian IT services and consultancy firm Tata Consultancy Services (TCS) has reported after-tax profit of $923 million for Q1 ended June 30, 2017, down 7 percent from $992 million in the previous quarter and 1.9 percent from $940 million from the previous corresponding quarter in 2016.

Operating income for the quarter was $1.07 billion, a 1.9 percent decrease from the $1.09 billion reported in the previous corresponding quarter, and 6.4 percent from the $1.15 billion reported in Q4 2016.

Revenue rose 5.2 percent from $4.4 billion in Q1 2016 to $4.6 billion in Q1 2017.

Digital revenue accounted for 18.9 percent of total revenue, up 7.6 on the quarter and 26 percent on the year.

Cash and cash equivalents increased 10 percent from $555 million in Q4 2016 to $611 million in Q1 2017.

The IT services company's income tax remained relatively stable at $294 million, down slightly from the $300 million paid in the previous quarter and the $296 million paid in the previous corresponding quarter in 2016.

During Q1 2017, TCS reorganised its service lines, adding "Cognitive Business Operations" and "Digital Transformation Services".

While the IT services company did not reveal the figures of each business line, it reported that revenue from Cognitive Business Operations increased more than 5 percent quarter-on-quarter (QoQ), led by a range of offerings in the domain of cloud adoption and regulatory compliance among others.

Cybersecurity services saw "double digit" QoQ growth with "strong demand" in compliance requirements, privileged access management, and cybersecurity.

Internet of Things-based services generated "high client traction" with more than 20 preliminary engagements in the areas of connected home, mobility, energy management, and remote monitoring.

Digital Interactive services saw the addition of three "multimillion dollar" contracts with insurance and energy clients.

"As we go through the early stages of Business 4.0, enterprises are reimagining themselves as leaner, responsive data-centric organisations by embracing Agile, Cloud, Analytics, and Automation," said TCS CEO Rajesh Gopinathan, who replaced N Chandrasekaran in January.

"We have retooled our organisation structures and go-to-market teams to remain relevant to customers and have introduced new service lines like Cognitive Business Operations and Digital Transformation services to capture these new opportunities."

TCS acquired 22 clients in the April to June quarter, eight of which were in the $1 million-plus band, 12 in the $10 million-plus band, and two in the $50 million-plus and $100 million-plus bands.

The company increased its headcount by 1,414 employees in Q1 2017, totalling 385,809.

The percentage of women in TCS rose to an all-time high of 34.8 percent while the number of nationalities increased to 134.


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