TCS Q3 Earnings Preview: What to Expect from Tata Consultancy Services

Tata Consultancy Services (TCS), is set to announce its third-quarter earnings for the fiscal year 2024-2025 (FY25) on Thursday. The results are being closely watched by investors, analysts, and market participants. As of 1:31 PM, TCS shares have experienced a decline of 1.63 per cent, trading at Rs 4,041.45 per unit on the National Stock Exchange (NSE). This marks a notable dip, as investors await the key financial figures that will shape market sentiment.

At 12:40 PM, the stock stood at Rs 4,072.95, down by 0.86 per cent. The fluctuations in TCS share price today reflect the market's anticipation of the company’s quarterly performance.

Key Metrics to Watch in TCS Q3FY25 Earnings

1. Revenue and Margin Growth: Analysts expect TCS to report flat revenue growth, with estimates ranging between Rs 64,150 crore and Rs 64,250 crore. This would indicate a modest performance, potentially impacted by seasonal factors such as higher furloughs during the holiday season and a slowdown in new deal wins.

2. Deals Pipeline: The company’s ability to secure new contracts and maintain its robust pipeline of deals will be a critical factor in determining its future growth prospects.

3. Management Commentary: Investors will be looking for insights from TCS’s management regarding the company's outlook for the next quarter, as well as any strategic initiatives it is undertaking to drive growth.

4. Attrition and Hiring Trends: With the IT sector facing challenges related to employee retention, TCS’s approach to managing attrition and its hiring plans will be closely scrutinized.

5. Client Acquisitions: The acquisition of new clients, particularly in high-growth areas such as cloud computing and artificial intelligence, will be a key focus.

In the second quarter of FY24, TCS reported a year-on-year (YoY) revenue growth of 7.6 per cent, totaling Rs 64,259 crore. However, net profit for the quarter showed a more modest increase of 4.9 per cent YoY, amounting to Rs 11,909 crore. On a quarter-on-quarter (QoQ) basis, the revenue rose by 2.6 per cent, while the net profit saw a slight decline of 1 per cent.

As of 11:52 AM, TCS’s market capitalization stands at Rs 14,75,691.27 crore, with a free float market capitalization of Rs 4,16,428.02 crore. The company’s shares have seen a trading volume of 10.12 lakh, with a total traded value of Rs 415.37 crore. These figures reflect the company’s strong presence in the market, despite the recent fluctuations in its stock price.

TCS’s leadership team remains stable, with N Chandrasekaran serving as the Chairman, alongside a strong group of independent and non-executive directors. K Krithivasan, the CEO and Managing Director, is expected to provide key insights into the company's performance during the earnings announcement.

Experts predict that TCS may report a sequential increase in net profit by 3 per cent to 4 per cent, with estimates ranging between Rs 12,280 crore and Rs 12,350 crore. While revenue growth is expected to be subdued, the company’s operational efficiency and cost management strategies may help drive profitability.

In addition to the earnings announcement, TCS is also expected to declare a dividend for its shareholders. The company has informed the exchange that the board will discuss and approve the dividend during the meeting. Investors will be keen to know the record date for the dividend payout, as it will determine eligibility for receiving the dividend.

The live updates for TCS’s third-quarter results can be followed through various platforms, including YouTube and LinkedIn, where the company will stream the press conference.