Tata Consultancy Services (TCS) posted a 1.1 percent quarter-on-quarter (QoQ) fall in net profit for the second quarter ended September to Rs 11,909 crore, missing Street expectations. India’s largest IT service firm’s Q2 FY24 revenue from operations rose to Rs 64,259 crore, showed the stock exchange filing.

A Moneycontrol poll of 10 brokerages pegged TCS’ July-September net profit at Rs 12,420 crore, and revenue at Rs 63,938 crore.

TCS also declared the second interim dividend of Rs 10 per share. The IT bellwether has already fixed Friday, October 18, 2024 as the record date to determine the eligibility of shareholders for the corporate action. Earlier, the company paid an interim dividend of Rs 10 on 19 July 2024.

Revenue growth was led by Energy, Resources and Utilities sectors, said the company in a statement.

"We saw the cautious trends of the last few quarters continue to play out in this quarter as well. Amidst an uncertain geopolitical situation, our biggest vertical, BFSI showed signs of recovery. We also saw a strong performance in our Growth Markets," said K Krithivasan, Chief Executive Officer and Managing Director of TCS.

The IT major's Q2 operating margin was at 24.1 percent, narrowing from 24.7 percent in the preceding quarter. The net margin was at 18.5 percent. TCS added a net 5,726 employees during the quarter. As of H1FY25, TCS added around 11,000 associates after a year of reduced hiring.

Analysts had expected the Tata group IT giant’s Q2 revenue to be driven by the ramp-up of key deals, particularly its ongoing partnership with BSNL, and the net profit to be bolstered by robust deal execution and the growth in North America, BFSI, and retail.

Rightly so, among geographies, India grew by 95.2% YoY in CC terms driven by the execution of the BSNL deal. TCS second quarter earnings come amid scaling of its Rs 15,000 crore BSNL deal. The deal involves establishing data centres and 4G sites across India, and laying the foundation for future 5G infrastructure.

North America continued to slowdown by 2.1 percent YoY CC decline; whereas UK grew by 4.6 percent YoY in CC terms and continental Europe grew by 1.8 percent growth.

Overall order book for TCS stood at $8.6 billion, a 23.2% decline YoY and a 3.61% increase sequentially. This quarter TCS saw several deals in the retail sector including Primark, McDonald's and Croma to name a few. The company is currently executing about 600 AI/ Gen AI projects in its pipeline.

Ahead of the results, TCS share price fell 0.6 percent today to end at Rs 4227.9 on NSE.