Tata Consultancy Services Ltd (NSE:TCS) Q2 2021 Earnings Conference Call - Final Transcript

Oct 07, 2020 • 10:30 am ET

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Tata Consultancy Services Ltd (NSE:TCS) Q2 2021 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, good day and welcome to the TCS Earnings Conference Call. [Operator Instructions]

I now hand the conference over to Mr. Kedar Shirali. Thank you, and over to you, sir.

Executive
Kedar Shirali

Thank you, Margaret.

Good evening and welcome, everyone. Thank you for joining us today to discuss TCS' financial results for the second quarter of fiscal year 2021 that ended September 30, 2020.

This call is being webcast through our website and an archive, including the transcript, will be available on the site for the duration of this quarter. The financial statements, quarterly fact sheet and press releases are also available on our website. Our leadership team is present on this call to discuss our results. We have with us today Mr. Rajesh Gopinathan, Chief Executive Officer and Managing Director.

Executive
Rajesh Gopinathan

Good evening and good day to all of you.

Executive
Kedar Shirali

Mr. NG Subramaniam, Chief Operating Officer.

Executive
N Ganapathy Subramaniam

Hello, everyone.

Executive
Kedar Shirali

Mr. V Ramakrishnan, Chief Financial Officer.

Executive
V Ramakrishnan

Yeah. Hello, everyone.

Executive
Kedar Shirali

And Mr. Milind Lakkad, Chief HR Officer.

Executive
Milind Lakkad

Yeah. Hi, everyone.

Executive
Kedar Shirali

Rajesh and Ramki will give a brief overview of the Company's performance, followed by a Q&A session.

As you are aware, we don't provide specific revenue or earnings guidance, and anything said on this call, which reflects our outlook for the future or which could be construed as a forward-looking statement must be reviewed in conjunction with the risks that the Company faces. We have outlined these risks in the second slide of the quarterly fact sheet available on our website and emailed out to those who've subscribed to our mailing list.

With that, I'd like to turn the call over to Rajesh.

Executive
Rajesh Gopinathan

Thank you, Kedar, and once again, good evening and welcome to this call. Thank you for joining us.

I'm pleased to share with you our Q2 performance, which has seen a very sharp recovery in our revenue growth and margins and another very strong order book. Of course, after last quarter's deep fall, our revenues mostly continued to be below prior year level in constant currency and US dollar terms. So we will use sequential or quarter-on-quarter growth figures in this call to give you a better idea of the immediate trends.

Our revenue grew 4.8% Q-on-Q in constant currency terms and 7.2% in reported dollar terms. In rupee terms, the revenue growth was 4.7% on a sequential quarter-on-quarter basis. Excluding an exceptional item towards a legal claim, our operating margin for the quarter was 26.2%, a sequential expansion of 259 basis points, and our net margin came in at 21%.

I'll now have Ramki go over all the headline numbers and the financial and segmental performance, and later I shall and step back in to talk about demand trends that we see.

Over to you, Ramki.

Executive
V Ramakrishnan

Thank you, Rajesh.

Let me go through the headline numbers.

In the second quarter FY '21, our revenue grew 4.8% sequentially, as Rajesh mentioned on a constant currency basis. Reported revenue in INR was INR401.35 billion, a quarter-on-quarter growth of 4.7%. And in USD