Q4FY24 Preview: Tata Consultancy Services: Revenues seen at ₹623,248 Million, PAT at ₹121,952 Million

10 Apr 2024 , 09:57 AM

Result date: April 12, 2024

Recommendation: Add

Target price: ₹4,000

Tata Consultancy Services (TCS) is all set to start the results season for the biggies on this Friday. Analysts at IIFL Securities are forecasting a revenue growth of 2.7% cc on a sequential basis, driven by a full-quarter ramp-up of the BSNL deal and reversal of furloughs in the US and Europe. They expect the company’s EBIT margins to remain broadly stable at 24.9% (down 10 basis points sequentially); as productivity benefits and muted hiring are partially offset by the lower-margin BSNL deal. The company could post healthy deal wins amid cost take-out deals.

Profit After Tax or PAT could grow 1.5% on a sequential basis.

Important management insights to watch out for:

• Overall demand environment for FY25; particularly for discretionary spending
• Deal-win TCV and decision-making cycles
• Vertical-wise outlook
• Potential margin levers for FY25, including expected wage hikes

	March 2024 estimates	QoQ change	YoY change
Revenue (US$ mn)	7,509	3.1%	4.4%
Revenue (₹ mn)	623,248	2.9%	5.3%
EBIT (₹ mn)	155,188	2.4%	7.1%
EBIT margin	24.9%	(10) bps	40 bps
Profit After Tax (₹ mn)	121,952	1.5%	7.1%
EPS (₹)	33.7	2.6%	8.3%

Source: IIFL Research