Tata Consultancy Services (TCS), a 56-year-old giant of the Tata Group, has witnessed a significant rise in its headcount for the first time in four quarters. In Q1FY25, TCS added 5,452 employees to its workforce, signaling a recovery in growth after a sluggish FY24. This increase in headcount comes alongside a robust financial performance, with notable profits and revenue growth.
Significant Headcount Addition
After letting go of 13,249 employees in FY24 due to macroeconomic uncertainties, TCS has turned a corner. By the end of June 2024, TCS’s workforce stood at 606,998, a net addition of 5,452 employees from the previous quarter’s 601,546. This growth indicates a positive shift in the company’s trajectory, suggesting that the tech sector is rebounding from the previous year’s downturn.
Diverse and Skilled Workforce
TCS’s workforce is notably diverse, with 35.5% women and representation from 151 nationalities. The company has invested heavily in training, with employees logging 11 million learning hours and acquiring 1.2 million competencies. Despite these investments, TCS recorded an IT services attrition rate of 12.1% over the last twelve months. Milind Lakkad, Chief HR Officer, expressed satisfaction with the annual increment process and the company’s strong retention and business performance.
Financial Performance Highlights
TCS reported a consolidated net profit growth of 8.7% year-on-year (YoY) to ₹12,040 crore in the first quarter, despite experiencing degrowth in several business areas. The net margin for the quarter ending June 30, 2024, was 19.2%. Revenue grew by 5.4% to ₹62,613 crore, and operating margin expanded by 1.5% YoY to 24.7%. Net cash from operations stood at ₹11,168 crore, representing 92.8% of net profit. The board approved a dividend of ₹10 per share, highlighting the company’s financial strength.
Strategic Investments and Innovations
TCS continues to expand its client relationships and invest in emerging technologies. The company is building new capabilities, such as an AI-focused TCS PacePort in France and an IoT lab in the U.S., while expanding delivery centers in Latin America, Canada, and Europe. CEO K Krithivasan emphasized the company’s commitment to innovation and growth across industries and markets.
Market and Sector Performance
During the quarter, the North American market experienced a slight decline, while other regions saw growth. India, in particular, witnessed a robust 61.8% YoY growth. The manufacturing sector led year-on-year growth at 9.4%, followed by energy, resources, and utilities at 5.7%, and life sciences and healthcare at 4.0%. Despite some sectors experiencing degrowth, the overall performance was strong.
