TCS Q4 Net profit is estimated at Rs 11,739 Cr. higher by 6.16% QoQ, revenue is expected to be around Rs 60,559 Cr. seen flat QoQ.
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| TCS Q4 FY24 Result |
As markets await results for the Q4 on April 12, five key points will be in focus in the management commentary by TCS.
Demand Outlook
TCS has not reported any mega deals this quarter. TCS bags a bunch of multi-million dollar deals from Aviva, Ramboll and the Central Bank in the US. Analysts are expecting a good order book.
As per the report by Mint, the 15-year Aviva contract could be of around $2.5 billion, this is TCS biggest deal ever.
TCS previous guided range of $9-10 billion in Q3FY24, but now managed to clock in $8.1 billion in order book without a big deal.
In the last quarter, TCS reported a slowdown in its BFSI vertical which accounts for nearly 35-40% of the company revenue.
Sharekhan report said, “Despite the elongated deal cycle due to the macro-overhang, the deal TCV over 9MFY24 is robust at $29.5 billion. We believe the ramp-ups of deals with JLR, BSNL, Nest and Aviva should contribute strongly to the company’s revenue growth recovery in FY25,”
Revenue Growth
According to Moneycontrol estimates, revenue for the quarter is expected to be around Rs 60,559 crores, growing 2.36 percent YoY and remained flat.
Net profit is estimated at Rs 11,739 crores, a 3.05% jump YoY and 6.16 percent increase sequentially.
TCS will be the best positioned drive revenue growth. “TCS, aided by BSNL deal ramp, will likely lead the growth,” said a Jefferies report.
As per Moneycontrol estimates, EBIT margins or operating margins are expected to remain flat in Q4FY24 at 25%.
Sharekhan analyst expect some improvement for TCS on the margin front this quarter driven by better utilisation and lower sub-contracting expenses, offsetting lower margins from BSNL deal.
Hiring Plans
Last quarter, TCS headcount dropped by 5,680 on a net basis. This was the second consecutive quarter of headcount decline for the company while it maintained that it is on track to hire 40,000 freshers as planned for FY24.
TCS company has announced fresher hiring tests for FY25.
FY25 Growth Commentary
TCS company goals to expand business in some of its in-demand and newer segments including EVs, AI and semiconductors.
CEO K Krithivasan had said that he expects FY25 to be better than FY24. He said that budgets are no longer sacrosanct as customers are ready to re-calibrate depending on opportunities.
Jefferies analysts said, "We expect IT firms to be cautious on FY25 guidance given that most missed their initial guidance range in FY24 and recent guidance ranges from overseas peers suggest the demand environment remains subdued."