TCS Q1 misses street estimates, profit falls 13% to Rs 7,008 crore

The country's top IT services major Tata Consultancy Services (TCS) on July 9 flagged off the June quarter earnings season by reporting profit at Rs 7,008 crore, down 12.9 percent QoQ dented by lockdown-led supply and demand challenges. The year-on-year fall in profit stood at 13.8 percent.

Consolidated revenue declined 4.1 percent sequentially to Rs 38,322 crore in quarter ended June 2020, but the same increased 0.4 percent year-on-year.

"The revenue impact of the pandemic played out broadly along the lines we had anticipated at the start of the quarter. It affected all verticals, with the exception of Life Sciences and Healthcare, with varying levels of impact. We believe it has bottomed out, and we should now start tracing our path to growth," Rajesh Gopinathan, Chief Executive Officer and Managing Director said.

"After an initial period of disruption, customers have now stabilized their operations and are now embarking on new beginnings to adapt and thrive in a post-pandemic world. We are seeing many customers focus on front-end transformation, resulting in significant traction for our products and services," he added.

"TCS numbers missed estimates and numbers give a grim picture. Retail continue to getting challenging but BFSI surprised with some parts of US and UK services resumed with insurance, mortgage sectors working on, so the sector may get headwinds but services continue," Prakash Diwan of Altamount Capital told CNBC-TV18.

"Only worry is the depreciation in dollar, which is a reality and that could takeaways some gains. Hence that is the first sign of weakness, but hopeful that things could improve in subsequent quarters," he said.

The stock gained 14 percent in the June quarter and rose 3.6 percent year-to-date to trade around its highest level of the year 2020, while Nifty IT index was up 15.6 percent during the quarter and down 6 percent year-to-date.

In a BSE filing on July 7, the company said it received nine complaints from investors, of which seven were disposed of and two remained unresolved at the end of the June quarter.