TCS Share Price in Focus Ahead of Q3 FY25 Earnings Release

January 9, 2025, marks the opening of the Nifty 50 earnings season for Q3FY25 with the release of earnings from India’s IT giant Tata Consultancy Services (TCS) Ltd. Before the release of financial statements for Q3FY25, the preview and expectation of street is must watch.

TCS Q3 FY25 Earnings Preview

As per news reports, IT giant TCS is expected to report a 0.2% growth in constant currency terms, which is anticipated to be lower than both the September quarter and the same quarter last year. The slower growth is attributed to the reduced contribution from the BSNL deal and furloughs.

The BSNL contract is set to begin its ramp-down in March 2025, with a significant decline in revenue expected by the June 2025 quarter. In US Dollar terms, TCS’ revenue is projected to decline by 0.6% sequentially, while its margin may increase by 40 basis points. Both TCS’ net profit and EBIT are expected to experience low single-digit growth on a sequential basis.

What Investors Need to Watch in TCS Earnings?

• What will the company’s growth be in the quarter, excluding the BSNL deal?
• The company’s international revenue may decline by 0.4%, marking the weakest performance since the pandemic.
• As per news reports, Analysts are predicting nearly 5% revenue growth for the full financial year, with more than half, or 2.7% to 2.8%, expected to come from the BSNL deal. This implies organic growth is estimated to be around 2%.
• An important factor to watch is whether the 8% growth target for the 2026 financial year is too ambitious, considering the ongoing decline of the BSNL contract.
• Additionally, attention should be paid to management’s commentary on the reasons behind the revenue growth underperformance compared to the broader IT industry, excluding the BSNL revenue.

On January 9, 2025, TCS share price opened at ₹4,105.90 and touched the day high of ₹4,122.95 at 09:20 AM.

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