Introduction
Tata Consultancy Services (TCS), India’s largest IT services company, is set to announce its Q3FY25 financial results on January 9, 2025, after market hours. This quarter marks a seasonally weaker period for IT companies due to furloughs, but signs of a potential recovery in technology spending provide a positive outlook for CY25.
While TCS shares have seen a 4% decline during the December quarter, analysts anticipate modest profit growth and margin expansion driven by operational efficiency and normalization of client-specific challenges.
Key Highlights of TCS Q3FY25 (Expected)
TCS is likely to report a revenue of ₹64,190 crore for Q3FY25, marginally down by 0.11% compared to ₹64,259 crore in Q2FY25. In USD terms, the revenue is expected to decline by 0.72%, reflecting the impact of furloughs and lower revenues from the low-margin BSNL deal.
Despite these challenges, the deal pipeline remains robust, with momentum in BFSI, although analysts highlight potential weaknesses in the UK, Europe, and the manufacturing sector.
TCS is projected to report a net profit of ₹12,298 crore, registering a 3.26% sequential growth from ₹11,909 crore in Q2FY25. On a YoY basis, this reflects a significant 11.2% growth compared to ₹11,058 crore in Q3FY24.
TCS’ EBIT is expected to rise to ₹15,645 crore, with EBIT margins improving by 20 bps to 24.3%. Key drivers include:
Brokerage firm Nuvama Institutional Equities predicts 0.1% QoQ constant currency revenue growth. Motilal Oswal Financial Services anticipates significant clarity for the IT sector after Q3FY25, as client budgets for CY25 will shed light on future growth patterns.
As of 2:55 PM, January 8, 2025, TCS shares were trading at ₹4,092.45 on the BSE, reflecting a 1.60% intraday increase.
While Q3FY25 is expected to be a subdued quarter for TCS due to furloughs and client-specific challenges, the company’s operational efficiency and steady deal pipeline highlight resilience. The broader IT sector awaits clarity post-Q3FY25 with the finalization of client budgets for CY25.
Stay tuned for TCS’ official Q3FY25 results and management commentary, which will provide further insights into the IT industry’s performance and future outlook.
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