TCS Q1 profit rises 8.7%; wage hikes, demand slump drag sequential numbers

India’s largest software services firm, Tata Consultancy Services (TCS), reported a sequential 3.16% drop in net profit in the June quarter due to the impact of wage hikes for many of its 600,000-plus workforce and an unabated slowdown in demand.

TCS posted a net profit of Rs 12,040 crore, below analyst expectations but 8.7% up from the year earlier. It reported revenue of Rs 62,613 crore, up 5.4% from the year earlier and 2.25% sequentially. The company didn’t signal any significant uptick in technology services demand, which has hit an all-time low due to macroeconomic uncertainties and geopolitical strife that’s impacted the key markets of the US, the UK and Europe. Much of the incremental growth came from the Rs 15,000 crore deal with state-owned telco Bharat Sanchar Nigam Ltd (BSNL) signed last year that led to its India business showing a jump of 61.8% from the year earlier.