Q2FY24 Preview: TCS: Revenues seen at Rs. 602,683 million, PAT at Rs. 114,978 million

9 Oct 2023 , 10:50 AM

Result date: October 11, 2023

Recommendation: Buy

Target price: Rs 3,800     

Analysts at IIFL Capital Services are forecasting revenue growth of 1.2% cc QoQ in Q2, as ramp-up of previously-won deals is partially offset by continued weakness in discretionary spend. Margins should expand 80 basis points sequentially, due to the absence of visa costs and continued easing supply side. They expect deal wins to remain strong, driven by the large cost takeout deals. 

The company’s Profit After Tax (PAT) is estimated to grow by 3.8% sequentially.

Important management insights to watch out for:

• Strategic changes under the new CEO
• Deal win TCV and nature of deals
• Outlook by vertical through FY24
• Potential margin levers through FY24
• Capital allocation
• Details on the buyback

	September 2023 estimates	QoQ change	YoY change
Revenue (US$ mn)	7,288	0.9%	6.0%
Revenue (Rs. mn)	602,683	1.5%	9.0%
EBIT (Rs. mn)	144,434	5.0%	8.8%
EBIT margin	24.0%	80 bps	–
Profit After Tax (Rs. mn)	114,978	3.8%	10.2%
EPS (Rs.)	31.4	3.8%	10.2%

Source: IIFL Research