Result Analysis Tata Consultancy Services Ltd

Tata Consultancy Services is the largest IT Company in India and the global leader in IT services, consulting and business solutions with an extensive global network. The company offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. It provides services to industries such as BFSI, manufacturing, telecommunications, retail and transportation. The company serves to the world’s biggest conglomerates like Google, Amazon, Apple, IBM, Bosch, Adobe etc.

Result Analysis: Tata Consultancy Services Ltd. (CMP: Rs.3735)

Result Update: Q3FY24

Outlook:

TCS reported soft earnings in Q3FY24 as expected majorly due to the prevailing slowdown across key geographies.i.e.US/Europe and seasonal weakness. However, the margin is going to improve further in the coming quarters owing to company’s focus on the improvement in employee utilization and productivity. The strong order book and exposure to long duration orders suggests better earnings going forward; Company’s focus towards Gen AI as well as AI and digital adoption would gather further opportunities, hence, we remain positive on the company with the target of 4500.

Results:

Management Commentary:

Commenting on December quarter results, K Krithivasan, CEO and MD said, “Our strong performance in a seasonally weak quarter buffeted by macro-economic headwinds, demonstrates the strength of our business model with a well-diversified portfolio and a customer centric strategy. We are seeing strong deal momentum across markets resulting in a solid order book providing visibility into our long-term growth. We are seeing tremendous interest in Generative AI and are leading the innovation and exploratory efforts for our customers in this area.”

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