Q1FY24 Preview TCS: Revenues seen at Rs. 594,986 million, PAT at Rs. 110,608 million

11 Jul 2023 , 10:26 AM

Result date: 12^th July, 2023

Recommendation: Buy

Target price: Rs 3,580

Tata Consultancy Services (TCS) will announce its results for the quarter ended June 30,2023 on July 12. Analysts at IIFL Capital Services expect the company to post revenue growth of 0.3% cc QoQ, primarily due to lower discretionary spends by clients amid an uncertain macro. 

Margins of TCS should contract by 120 basis points sequentially, due to the impact of wage hikes and visa costs partially offset by easing supply side. Analysts at IIFL Capital Services expect deal wins to remain healthy, driven by large deals. 

The company’s Profit After Tax (PAT) could decline 2.9% on a sequential basis.

Important management insights to watch out for:

• Key strategic priorities under the new CEO
• Deal-win TCV and nature of deals
• Commentary on outlook for discretionary spend through FY24
• Potential margin levers through FY24
• Commentary on capital allocation

	June 2023 estimates	QoQ change	YoY change
Revenue (US$ mn)	7,236	0.6%	6.7%
Revenue (Rs. mn)	594,986	0.6%	12.8%
EBIT (Rs. mn)	138,626	(4.3)%	13.8%
EBIT margin	23.3%	(120) bps	20 bps
Profit After Tax (Rs. mn)	110,608	(2.9)%	16.7%
EPS (Rs.)	30.2	(2.9)%	16.7%

Source: IIFL Research