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
Stock Details
Market Cap. (Cr.) 1358861.88
Equity (Cr.) 365.91
Face Value 1
52 Wk. high/low 3929 / 3070
BSE Code 532540
Book Value (Rs) 275.04
Sector IT – Software
Key Ratios
Debt-equity: 0.09
ROCE (%): 58.04
ROE (%): 47.26
TTM EPS: 122.04
P/BV: 13.58
TTM P/E: 30.43

 Financial Performance:


Shareholding Pattern:

Particulars (In %) Q1FY24 Q2FY24
Promoters’ Group 72.3 72.3
FIIs 12.67 12.69
DIIs 9.86 10.06
Public 4.91 4.72
Others 0.25 0.24

Result Highlights:

  • Despite macro uncertainties, TCS reported an improved performance during Q3FY24, backed by strong double-digit growth across Emerging markets, led by India (up by ~23% YoY) along with strong deal wins.

  • On a sequential basis, revenue increased by 1.5% QoQ and net profit by 5.1% QoQ. EBIT increased by 4.6% QoQ and EBIT Margin improved by 70 bps to 25% due to the reduction in employee cost and depreciation expenses.

  • Among segments, BFSI i.e. the major contributor in the revenue showed no growth QoQ. Communication segment grew healthy by 3.8% QoQ while manufacturing, Life sciences & Healthcare and Retail grew by 2.5%, 1.5% and 0.5% QoQ respectively.

  • In Q3FY24, on a YoY basis in CC terms, the growth in revenue from different geographies among major markets was: UK by 8.1%, Continental Europe by 0.5% while North America declined by 3%. Amongst emerging markets, the growth was led by India 23.4%, Middle East & Africa grew by 16%, Latin America by 13.2% and Asia Pacific grew by 3.9%.

  • Among Company’s product & platforms, the MCX platform scaled well during the quarter with record transaction volumes processing. Ignio, the suite of cognitive automation software saw 27 new deal wins and 6 projects going live during Q3FY24. TCS BaNCS, its flagship product suite in the financial services domain had 6 new deal wins and deals going live during the quarter. This will further enable transformation, replacing the existing platform for cash equities clearing and settlements. TCS Hobs, a suite of product communication service provider won 1 new deal and 2 go-lives during the quarter.

  • The deal TCV moderated QoQ to USD 8.1bn VS. USD 11.2bn in previous quarter. Book to bill ratio stands at 1.1x.

  • During the quarter, company commenced rolling out BSNL 4G/5G network infrastructure across India covering 1,00,000 telecom sites. The project involves supply, planning, design, installation and commissioning, and optimization of this mobile network.

  • Attrition rate dropped further in the quarter and stands at 13.3% compared to 14.9% of Q2FY24; Company’s headcount is declining quarterly, lost 5,680 associates during the quarter, and had a closing headcount of 6,03,305.
  • Board of the company announced a dividend of Rs.27/share, including special dividend of Rs.18/share; record date for dividend is 19/01/2024 and payment date is 05/02/2024.


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.


Particulars (In Rs. Cr.) Q3FY24 Q2FY24 Q3FY23 QoQ% YoY%
Revenue from Operations 60,583 59,692 58,229 1.5% 4.0%
Other Income 862 1,006 520 -14.3% 65.8%
Total Income 61,445 60,698 58,749 1.2% 4.6%
Employee Benefit Expenses 34,722 35,123 32,467 -1.1% 6.9%
Employee benefit Expenses as % of Sales 57.3% 58.8% 55.8% -150 bps 150 bps
Cost of Equipment & Software licences 1,173 462 643 153.9% 82.4%
Depreciation & Amortisation Expense 1,233 1,263 1,269 -2.4% -2.8%
Other Expense 8,300 8,361 9,566 -0.7% -13.2%
EBIT 15,155 14,483 14,284 4.6% 6.1%
EBIT Margin (%) 25.0% 24.3% 24.5% 70 bps 50 bps
PAT 11,734 11,162 11,689 5.1% 0.4%
PAT Margin (%) 19.4% 18.7% 20.1% 70 bps -70 bps
EPS (In Rs.) 30.29 31.00 29.64 -2.3% 2.2%
Segment Revenue (In Rs. Cr.) Q3FY24 Q2FY24 Q3FY23 QoQ% YoY% Revenue %
BFSI 22,667 22,840 22,145 -0.8% 2.4% 37.4%
Manufacturing 5,931 5,787 5,428 2.5% 9.3% 9.8%
Retail and – Consumer Business 9,817 9,773 9,661 0.5% 1.6% 16.2%
Communication, Media and Technology 9,932 9,572 9,753 3.8% 1.8% 16.4%
Life Sciences and Healthcare 6,726 6,625 6,354 1.5% 5.9% 11.1%
Others 5,510 5,095 4,888 8.1% 12.7% 9.1%
Geography Revenue % Q3FY24 Q2FY24 Q3FY23 QoQ YoY
North America 50.6 51.7 53.7 -110 bps -310 bps
Latin America 2.1 2 1.8 10 bps 30 bps
UK 16.4 16.5 14.9 -10 bps 150 bps
Continental Europe 15.0 14.9 14.8 10 bps 20 bps
Asia Pacific 7.8 7.8 7.9 -10 bps
India 6.1 4.9 5.1 120 bps 100 bps
MEA 2.0 2.2 1.8 -20 bps 20 bps

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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