TCS share price highlights: TCS is set to announce Q3 results today

TCS share price surges as much as 0.71 per cent to hit an intraday high of Rs 4136.90 per share, on the other hand, TCS share price dropped as much as 0.90 per cent to hit an intraday low of Rs 4,070.25 apiece.

TCS share price soared

TCS share price soared as much as 0.71 per cent to hit an intraday high of Rs 4136.90 per share. On the other hand, TCS share price dropped as much as 0.90 per cent to hit an intraday low of Rs 4,070.25 apiece.

However, at 12:11 PM, TCS share price was trading 0.51 per cent lower at Rs 4,086.40 per share. In comparison, BSE Sensex was trading 0.55 per cent lower at 77,722.22 levels.

source: tradingview

TCS Q3 results preview

Brokerages tracked by Business Standard expect TCS to report a 6.3 per cent year-on-year (Y-o-Y) revenue growth for Q3, reaching Rs 6,445.63 crore, up from Rs 6,060 crore in the previous year.

Tata Consultancy Services (TCS), the largest information technology company in India, is set to announce its third-quarter earnings for FY25 on Thursday, January 9, 2025.

According to brokerages monitored by Business Standard, TCS is expected to report a year-on-year revenue growth of 6.3%, averaging around ₹6,445.63 crore, compared to ₹6,060 crore in the same quarter last year. On a quarter-on-quarter basis, revenue is projected to see a slight increase of 0.24%. However, this revenue growth may be influenced by seasonal furloughs and a reduction in revenue from the BSNL deal, which reached its peak in Q2.

Further, they expect TCS' adjusted profit after tax (PAT) for the quarter ended December 31, 2024, at an average of Rs 1,241.96 crore, an increase of 5.2 per cent as compared to Rs 1,180 crore a year ago. On a quarterly basis, the ajusted PAT is expected to grow at an average of 3.4 per cent.

Analysts say investors should focus on the management's commentary on near-term demand and pricing environment, BFSI, and deal wins.

TCS Q3 Revenue Outlook: Furloughs and BSNL Deal Impact Projections

Meanwhile, Q3 revenue is anticipated to be affected by seasonal furloughs and a decrease in revenue from the BSNL deal, which reached its peak in Q2.

Brokerages project revenue to be around ₹6,446 crore, up from ₹6,058 crore in the same period last year, reflecting a year-on-year growth of 6.4%. This figure represents a slight increase from ₹6,426 crore in the previous quarter.

Earnings before interest and taxes (EBIT) margins are expected to improve by 70 basis points quarter-on-quarter, despite challenges from furloughs. Factors such as rupee depreciation and reduced contributions from BSNL are likely to bolster margins. Analysts also anticipate that deal wins will remain steady, falling within the range of $7-9 billion.

TCS Q3 EBIT Margins Expected to Improve

The brokerage expects Ebit margins at 24.8 per cent for Q3 as compared to 24.1 per cent in Q2FY25.

Motilal Oswal: The brokerage expects growth to be subdued at 0.4 per cent Q-o-Q CC and revenue to be impacted by furloughs; however, client-specific challenges are likely to normalise in 3Q.

As per analysts at Motilal Oswal, EBIT margins are likely to improve by 40 bps, driven by talent development, training, and operational efficiency.

Motilal Oswal anticipates Ebit margins at 24.5 per cent as compared to 24.1 per cent Q-o-Q.

Further, the deal pipeline should remain healthy and there is some good momentum in Banking, Financial Services, and Insurance (BFSI), but weakness in UK/Europe and manufacturing needs to be monitored.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.