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Actual vs. expectations

Revenue and margin came in line with expectations

Likely stock reaction

Neutral

Key positives – Broad based growth, steady progress on client mining (5 new clients addition in USD100+mn bucket in Q2), deal intake at USD8.1bn (book-to-bill ~1.2x);

Result Summar

* TCS reported revenues of USD6.88bn, up 1.4%/8.6% QoQ/YoY (15.4% YoY CC and 4.1% QoQ CC), tad below our expectations of USD6.91bn.

* Adj. EBITM grew by ~90bps QoQ to 24%, in-line with our expectations.

* Adj. Profits at Rs104.3 bn vs our estimate of Rs105.4 bn, due to lower other income.

* TCV of deals signed during the quarter was at USD8.1bn vs USD8.2bn in Q1FY23.

*  The company has declared an interim dividend of Rs 8 per share.

* Management commentary: “Our order book is holding up well, with a healthy mix of growth and transformation initiatives, cloud migration and outsourcing engagements. As clients prepare for a more challenging environment ahead, technologies like cloud that have been embraced now have to be fully leveraged to realize the promised value.”

Growth by Verticals (all in CC terms)

* Financial Services: 13.1% YoY ( V/s 13.9% YoY in Jun’22)

* Retail: 22.9% YoY ( V/s 25.1% YoY in Jun’22)

* Life Sciences and healthcare: 14.5% YoY (v/s 11.9% YoY in Jun’22)

* Manufacturing: 14.5% YoY( V/s 16.4% YoY in Jun’22)

* Communications & Media: 18.7% YoY( V/s 19.6% YoY in Jun’22)

Growth by Geographies (all in CC terms)

* US: 17.6% YoY ( V/s 19.1% YoY in Jun’22 quarter)

* UK: 14.8% YoY( V/s 12.6% YoY in Jun’22 quarter)

* Continental Europe: 14.1% YoY( V/s 12.1% YoY in Jun’22 quarter)

*  India: 16.7% YoY( V/s 20.8% YoY in Jun’22 quarter)

* APAC: 7.0% YoY ( V/s 6.2% YoY in Jun’22 quarter)

Manpower details

Total Headcount: 616,171, up 9,840 QoQ

LTM Attrition: 21.5% V/s 19.7% in Jun’22 quarter and 17.4% in Mar’22 quarter.

Sept’22 result snapshot:

Actual vs estimates

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