Shares of Tata Consultancy Services (TCS) were trading 1.79 per cent higher at Rs 3979.90 per share on the BSE in intraday trade on Thursday.

TCS
Photo: PTI

SI Reporter New Delhi

Shares of Tata Consultancy Services (TCS) were trading 1.79 per cent higher at Rs 3979.90 per share on the BSE in intraday trade on Thursday. The stock price rose in anticipation of the IT services major’s announcement of financial results due today on July 11, 2024 for the first quarter of fiscal year 2024-25 (Q1FY25).

The Indian IT company is expected to report single-digit growth in its topline and bottomline for Q1FY25. Analysts in their preview note said the growth was due to a recovery in flow business and willingness of clients to resume discretionary spending, however, rising wages would have a negative impact on its margins.

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TCS is expected to report a net profit of Rs 11,771-12,140 crore for the June quarter, up 6-9% year-on-year from Rs 11,074 crore in Q1FY24. Sequentially, it may fall to 3-5 percent. According to brokerage estimates, revenue is forecast to grow by 4-5 percent year-on-year to between Rs 62,086-62,491 crore.

Most brokerages expect earnings before interest tax margin for TCS to decline in the range of 140 to 186 basis points in the quarter due to wage revisions and a possible reduction in utilization rates.

According to people at Kotak Institutional Equities, the earnings growth will be on the back of strong order signings from earlier quarters. With their estimates including $150 million from the BSNL deal, it is a marginal growth compared to the March 2024 quarter. Analysts said they expected weaker earnings in the financial services and telecom sectors.

Analysts are also keen on management commentary on client discretionary spending, lower deal announcements in Q1FY25, campus hiring, larger deals and changes to BFSI. Moreover, spending conditions in the affected North American market, high-tech and telecom verticals, pipeline of deals, and levers to defend and expand margins will also be important monitoring points for investors.

09:55 am; Shares of TCS were trading 0.96 per cent higher at Rs 3,947.40 per share on the BSE. In comparison, the BSE Sensex rose marginally by 0.04 percent.



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