TCS Q2 Results Review - Improving Demand Environment With Inline Quarter: Nirmal Bang

Nirmal Bang Report

Tata Consultancy Services Ltd. reported Q2 FY25 results with revenue growth in line with expectations, but missed margin estimates due to higher third party items. Revenue grew 1% QoQ in constant currency terms, driven by strong growth in energy, resources and utilities, and manufacturing.

The India market outperformed with a 95.2% YoY CC growth due to the BSNL deal ramp up. While North America saw a decline of 2.1% YoY, reflecting cautious client spending, it is likely to improve significantly from Q4 FY25 onwards.

TCS secured a total contract value of $8.6 billion, with BFSI contributing $2.9 billion and North America accounting for $4.2 billion. TCS continues to focus on vendor consolidation, Gen AI initiatives, and digital transformation.

Ebit margin at 24.7% was 70 bps/80 bps lower versus our estimate/consensus estimates. Margin headwinds include third party items (60 bps) and incremental investments in talent (70 bps). These were partly offset by currency tailwinds and a reversal of Q1 one-off.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.