Tata Consultancy Services (TCS) on Thursday reported profits in line with expectations as the country’s largest IT services firm benefited from the rupee’s depreciation and an upward momentum in its key verticals. Net profits at TCS grew 22.6 per cent to Rs 7,901 crore compared with Rs 6,446 crore in the same period last year.

Analysts had expected the IT services firm to do well given the fall in the rupee — down more than four per cent during the period — along with the fact that the second quarter is seasonally strong for the sector. However, there were a few other positive surprises as well.

A key highlight was the double-digit rise of 11.5 per cent in constant currency revenues over the corresponding quarter last year.

Further, operating margins jumped 150 basis points to 26.5 per cent on a sequential basis with 120 basis points coming from the rupee’s depreciation and operating efficiencies contributing 30 basis points.

Rajesh Gopinathan, CEO and managing director of TCS, said while TCS had stepped down from the double-digit growth trajectory two years ago, the effort since then has been to get back that run-rate.

“It has been a good quarter and a landmark in many ways. It is a re-affirmation of all that TCS stands for in terms of strategy and choice, differentiated positioning and differentiated operating model,” he added.

While TCS does not provide any guidance, Gopinathan disclosed that the company now has the momentum to ensure that the double-digit trajectory continues for the rest of the year despite the fact that the second half is usually a lean season for the sector.

During the quarter, revenues at TCS came in at Rs 36,854 crore, a growth of almost 21 per cent over the same period last year and 7.6 per cent over the preceding three months.

The period saw positive contribution from most of the geographies. While North America showed a growth of 8.1 per cent over the same period last year, it was 22.8 per cent in the UK and 17.4 per cent in continental Europe. Asia Pacific showed a growth of 12.5 per cent.

In terms of growth by domain, BFSI (banking, financial services & insurance) continued its upmove from the preceding quarter to post a growth of 6.1 per cent, while the growth in retail came in at 15.6 per cent over last year and that of energy and utilities stood at 22.2 per cent.

Digital revenues, too, maintained a good show and now accounts for around 20 per cent of its quarterly revenues.

TCS also declared an interim dividend of Rs 4 per share. Including the buyback, it has distributed around Rs 18,000 crore to shareholders.