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India’s largest IT sector company Tata Consultancy Services (TCS) is set to announce its Q3 FY25 results on January 9, kickstarting India Inc’s earnings season.
TCS will declare its Q3 financial results on Thursday.
India’s largest IT sector company Tata Consultancy Services (TCS) is set to announce its Q3 FY25 results on January 9, kickstarting India Inc’s earnings season. Investors and analysts are keenly watching how the country’s largest IT services provider has navigated economic uncertainties and volatile client spending. Here’s a detailed preview of TCS’s expected performance based on brokerage house analyses, offering insights into revenue trends, profitability, and growth drivers.
Revenue and Profit Expectations
According to various brokerage estimates, TCS is expected to report revenues in the range of Rs 63,929 crore to Rs 64,564 crore, with an average expectation of Rs 64,218 crore. This represents a YoY growth of 6.57-6.32 per cent and a QoQ growth of -0.51 per cent to 0.47 per cent. On the profitability front, net profit is projected to range between Rs 12,029 crore and Rs 12,653 crore, averaging at Rs 12,308 crore. This reflects YoY growth of 8.78-14.42 per cent and a QoQ improvement of 1.01-6.25 per cent.
TCS’ revenue in the previous quarter of Q2 FY25 had stood at Rs 64,259 crore, while net profit was at Rs 11,909 crore. In the year-ago Q3 FY24, its revenue was at Rs 60,583 crore a year ago and net profit at Rs 11,058 crore a year ago.
Brokerage Estimates
| Brokerage | Revenue (Rs Cr)(Estimates) | QoQ Revenue Change (%) | YoY Revenue Change (%) | Net Profit (Rs Cr)
(Estimates) |
QoQ Net Profit Change (%) | YoY Net Profit Change (%) |
|---|---|---|---|---|---|---|
| HDFC Securities | 64,369 | 0.17% | 6.25% | 12,029 | 1.01% | 8.78% |
| Emkay Institutional Equities | 64,564 | 0.47% | 6.57% | 12,653 | 6.25% | 14.42% |
| JM Financial | 64,139 | -0.19% | 5.87% | 12,179 | 2.27% | 10.14% |
| Prabhudas Lilladher | 64,460 | 0.31% | 6.40% | 12,480 | 4.79% | 12.86% |
| Kotak Institutional Equities | 63,934 | -0.51% | 5.53% | 12,241 | 2.79% | 10.70% |
| Elara Capital | 63,929 | -0.51% | 5.53% | 12,180 | 2.27% | 10.16% |
| Average | 64,218 | -0.06% | 5.90% | 12,308 | 3.35% | 11.36% |
Emkay Institutional Equities
Revenue Expectation: ₹64,564 crore (+0.47% QoQ, +6.57% YoY)
Net Profit Expectation: ₹12,653 crore (+6.25% QoQ, +14.42% YoY)
Emkay predicts the highest revenue among these six brokerages. Their profit outlook highlights effective cost management and improving margins, positioning TCS for double-digit YoY net profit growth.
Prabhudas Lilladher
Revenue Expectation: ₹64,460 crore (+0.31% QoQ, +6.40% YoY)
Net Profit Expectation: ₹12,480 crore (+4.79% QoQ, +12.86% YoY)
JM Financial
Revenue Expectation: ₹64,139 crore (-0.19% QoQ, +5.87% YoY)
Net Profit Expectation: ₹12,179 crore (+2.27% QoQ, +10.14% YoY)
JM Financial also said TCS’ dollar revenue is seen at $7,596 million, down 0.3 per cent sequentially or up 4.6 per cent. Sales growth in CC terms is seen flattish, as BSNL turns into a headwind now. Ebit margin is seen at 24.3 per cent in Q3 against 24.1 per cent in Q2 and 25 per cent in the Q3FY24. Lower revenues from low-margin BSNL deal and operational efficiency is seen driving this sequential margin expansion.
Kotak Institutional Equities
Revenue Expectation: ₹63,934 crore (-0.51% QoQ, +5.53% YoY)
Net Profit Expectation: ₹12,241 crore (+2.79% QoQ, +10.70% YoY)
HDFC Securities
Revenue Expectation: ₹64,369 crore (+0.17% QoQ, +6.25% YoY)
Net Profit Expectation: ₹12,029 crore (+1.01% QoQ, +8.78% YoY)
Elara Capital
Revenue Expectation: ₹63,929 crore (-0.51 QoQ, +5.53 YoY)
Net Profit Expectation: ₹12,179 crore (+2.27% QoQ, +10.16% YoY)
Elara Capital said, “For TCS, we expect USD revenue to decline 0.8 per cent QoQ, hit by furloughs and ebbing revenue from the BSNL deal. TCS, with wage hike already given in Q1FY25, may see a margin expansion of 40bps QoQ due to deceleration in BSNL deal-related costs, which hit Q2 margins.”
Per estimated by Elara Capital, TCS is expected to record Q3 revenue at Rs 63,929.20 crore, reporting a growth of 5.5 per cent. Profit for the quarter in review is estimated at Rs 12,180.30 crore, up 10.1 per cent YoY and EBIT margin is projected at 24.5 per cent.
Brokerage Motilal Oswal expects growth to be subdued at 0.4 per cent Q-o-Q CC and revenue to be impacted by furloughs; however, client-specific challenges are likely to normalise in 3Q.
As per analysts at Motilal Oswal, EBIT margins are likely to improve by 40 bps, driven by talent development, training, and operational efficiency. Motilal Oswal anticipates Ebit margins at 24.5 per cent as compared to 24.1 per cent Q-o-Q.
Market Sentiment and Expectations
Market participants expect TCS to deliver steady results, reinforcing its reputation as a resilient leader in the IT sector. Management commentary on deal wins, IT spending trends, and macroeconomic conditions will be pivotal in shaping expectations for the rest of FY25.
TCS’s Q3 FY25 results will likely highlight its ability to sustain growth amidst a challenging global environment. With an average revenue expectation of ₹64,218 crore and a net profit of ₹12,308 crore, the company is expected to set a positive tone for India Inc’s earnings season. Key insights from the results will guide investors and analysts in assessing the health of the IT sector and broader market trends.
