TCS Q3 results preview: What to expect? Top 5 things to track

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TCS Q3 results preview: What to expect? Top 5 things to track

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January 9, 2025

TCS Q3 results preview: What to expect? Top 5 things to track

Jan 09, 2025 01:09 PM IST

TCS, India’s largest information technology (IT) company is set to release its third quarter results for the financial year 2024-25 on Thursday, January 9, 2025

Tata Consultancy Services Ltd (TCS), India’s largest information technology (IT) company, is set to release its third quarter results for the financial year 2024-25 on Thursday, January 9.

15000-crore 4G deal with BSNL involves the setting up large data centres.(Bloomberg)” title=”TCS’ ₹15000-crore 4G deal with BSNL involves the setting up large data centres.(Bloomberg)”>

TCS’ ₹15000-crore 4G deal with BSNL involves the setting up large data centres.(Bloomberg)

The following are the expected results for the IT giant, according to an Economic Times report which cited estimates by multiple top brokerages.

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1) TCS Q3 revenue

TCS may see an uptick between 5.2% and 6.4% in its revenue, ET reported, citing the estimates of Nomura, Motilal Oswal Financial Services, JM Financial, and Elara Capital.

The company’s revenue, especially from banking, financial services, and insurance (BFSI) and consumer businesses, will provide insight into the revival of IT demand in developed markets.

2) TCS Q3 profitability

Nomura expects profitability, measured using the earnings before interest and taxes (EBIT) margin, to increase by 110 bps, while HDFC Securities and Motilal Oswal predict a 50-80 basis point decline.

HDFC Securities expects the company’s adjusted profit after tax (PAT) growth to be 2% YoY, while others like Motilal Oswal Financial Services and Elara estimate an 8-10% YoY growth.

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3) Deals

According to BNP Paribas, TCS showed a slowdown in winning deals during the third quarter, likely due to the holiday season.

However, according to the report, the company still led the large-cap pack in this regard, with five deals from Bank of Bhutan, Telenor Denmark, Landis+Gyr, Bank of Baroda, and Chorley Building Society.

4) Q3 Furlough and BSNL deal

A furlough is a temporary and unpaid leave from work caused due to no work being available, though the status of employment still continues.

The furloughs seen in Q3, along with GCC dynamics in deals and the declining revenue from the BSNL deal may lead to a 0.8% decline in revenue compared to the previous quarter, according to Elara securities.

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5) AI

The company’s progress on GenAI is also an important factor which has to be monitored.

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