Q4 Results Today: What to expect from TCS earnings?

TCS Q4FY24 results

IT bellwether Tata Consultancy Services will kickstart the fourth quarter earnings season for the sector on Friday, and the company is likely to see an improvement in the performance sequentially due to reversal of furloughs.

Some recovery in the mainstay banking, financial services and insurance (BFSI) vertical and continued traction in the manufacturing sector are likely to help TCS report 1.0-1.1% sequential growth in revenue in constant currency terms for the quarter ended March, according to analysts.

TCS’ consolidated revenue is seen rising 1.4% sequentially to Rs 61,428.4 crore, and profit is expected to grow by 2.7% to Rs 12,050 crore, according to the average of estimates given by 10 brokerage firms.

On a year-on-year (YoY) basis, the software major’s topline and bottomline may rise 3.8% and 5.8%, respectively.

Further, most analysts see a sequential improvement in the profitability for TCS on the back of operational efficiencies.

Analysts’ estimates of operating margin for the March quarter, calculated as earnings before interest and taxes (EBIT), are in the range of 25.2-27.2%, compared to 25% in the December quarter.

In the December quarter, TCS booked deals worth $8.1 billion, after seeing strong $10 billion worth of deal wins in the preceding three quarters. However, this remained within the company’s guided range of $7-9 billion, and Nirmal Bang Institutional Equities expects deal wins in the March quarter as well to be within this range.

The key monitorables for Dalal Street investors would be an outlook for FY25 for key verticals like BFSI, Hi-Tech, and telecommunications and for its key markets such as the US and Europe, especially after a bleak outlook from peer Accenture Plc last month.

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