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19 Nov 2024
Tata Consultancy Services (TCS) shares surged by 1.79% to Rs 3979.90 per share on the BSE during Thursday’s intraday trading. This rise is in anticipation of the IT giant’s financial results for Q1FY25, set to be announced today, July 11, 2024.
TCS is anticipated to show single-digit growth in both revenue and net profit for Q1FY25, driven by a recovery in business activity and increased client spending. However, wage hikes are expected to negatively impact profit margins, according to analysts.
Most brokerages predict a decline in earnings before interest and tax (EBIT) margins, estimated to drop by 140 to 186 basis points quarter-on-quarter due to wage revisions and a likely decrease in utilization rates.
According to Kotak Institutional Equities, revenue growth will be propelled by the ramp-up of strong order signings from previous quarters. This includes an estimated $150 million from the BSNL deal, resulting in marginal growth compared to the March 2024 quarter.
Analysts anticipate weak performance in the financial services and telecom segments.
TCS is expected to report modest growth in Q1FY25, with significant impacts from wage hikes on margins. While revenue will benefit from past strong order signings, including a notable BSNL deal, financial services and telecom segments might show weaker results.
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