TCS posted a net profit of Rs 64.46 billion (USD 990 million) in the three months to Sept 30, beating analysts' average estimate of Rs 63.06 billion, Thomson Reuters data showed.
Revenue from digital services rose 5.9 percent in the September quarter over the previous quarter and 31 percent over the year-ago period to account for 19.7 percent of TCS's total sales.
Commenting on the Q2 performance, Rajesh Gopinathan, CEO and MD, said, "We experienced robust volume growth in Q2, driven by good demand across multiple industry verticals".
He said in retail, the company expects an improvement in the next few quarters, but declined to specify a timeline for BFS, the larger revenue contributor, where the commentary was limited to saying that the momentum is positive.
For the quarter just gone by, in the current fiscal year that ends March 2018, the performance has been "very satisfying, striking a good balance between pursuing revenue growth, particularly in digital opportunities, while tightening our execution to deliver greater efficiency", said N Ganapathy Subramaniam, COO at TCS. It will announce its Q2 quarterly results for quarter ended September 30.
"The overall sense when we speak to clients is returning to optimism, it is measured". The firm said it saw attrition reduce to 11.3 per cent, as it focused on training its resources in emerging technologies and digital, which has helped it grow its business in the newer domains.
It, however, made clear that even though there is a non-linearity in revenue growth and employee additions, it is not considering any layoffs.
South Africa's Durban Port remains closed after severe storm
This included the stricken MSC INES container vessel that was grounded across the port's entrance channel. Five tugs successfully towed the 9,115-TEU, 348.5 metre vessel to safety.
Revenue at $4,739 million in Q2 was up 3.2 per cent from $4,591 million a quarter ago and 8.3 per cent up from $4,374 million a year ago.
Gopinathan said the company is close to sealing a United States dollars 50 million deal in offering internet of things solutions.
The company added 28 clients in $1 million plus band.
The company said that revenues on the domestic front were flat and expressed "concern" on the Government business, blaming the way the contracts are structured and also the seasonality element which leads to dips in business.
On NSE, shares of the company jumped 1.91 per cent to close at Rs 2,548.20.
The results of TCS, the first to report quarterly earnings among Indian software exporters, augur well for the nation's information technology sector amid concerns companies could report muted financial performance in the second quarter because of a slowdown in the US financial services and retail industries.