TCS Q2 Results Review - Miss On Both Top, Bottom Line, Commentary Remain Stable: Dolat Capital

Dolat Capital Report

Tata Consultancy Services Ltd. reported constant currency revenue growth of 0.9% QoQ, (below our estimate of 1.9%), which includes 160 basis points+ incremental contribution from BSNL deal and thus implies muted performance in rest of business.

TCS' operating profit margin was down by 60bps QoQ at 24.1% (our estimate: 25.4%), due to higher pass-through biz.

Management. pointed out that demand environment remains cautious, and it is seeing an increase in the timeline of deal closures. Overall, it sees similar discretionary spending versus earlier quarters.

We slightly tweak our FY25/FY26E earnings per share estimates by 1.2%/0.8% considering the ongoing challenges.

Maintain ‘Reduce' rating with target price of Rs 4,240 at 26 times on FY27E (implies ~three times price-to-earnings growth).

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.