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.jpg?downsize=1080:540 "TCS Q4 Updates: Profit Dips 1.3%; Anand Rathi Profit Up 31%")
Anand Rathi Q4 Highlights (YoY)
Total Income up 22.5% at Rs 232 crore versus Rs 189 crore.
Net profit up 30.5% at Rs 72.4 crore versus Rs 55.5 crore.
Declares final dividend of Rs 7 per share.
Onboarded 42,000 employees in fiscal 2025 and the trend is likely to be similar this fiscal.
Wage hikes will be decided based on the demand environment.
Campus hiring is strategic and will continue.
Net additions will depend on business needs and skill requirements.
New hires will be needed for AI-led opportunities.
AI is not impacting overall hiring plans.
Company will deliver more work for customers going forward.
No margin impact is expected in the short term.
Investments are continuing as planned.
Deal durations remain unchanged.
No reduction in customer commitment is being observed.
AI continues to increase customer engagement and deal activity.
Operating leverage is likely to be impacted in the current uncertain environment.
The BSNL deal is headed towards closure and is expected to conclude in the first quarter of fiscal 2026.
Retail, consumer packaged goods, travel and hospitality are the most impacted sectors.
The auto sector has been impacted due to tariffs.
BFSI (banking, financial services, and insurance) demand remains stable.
Cost optimisation programmes present an opportunity to gain market share.
The newly appointed COO will drive focused growth in new technologies.
Aarthi Subramanian has extensive experience at TCS and is the most appropriate choice for the role.
Deal duration has not changed, and customer commitment levels remain intact.
No reduction in deal commitment is being seen from clients.
AI continues to drive increased commitment with customers.
Market share has shifted slightly away from North America, with India picking up.
Focus on North America will continue.
K. Krithivasan, CEO of Tata Consultancy Services. (Imagecredit: Vijay Sartape/NDTV Profit)
Uncertainty began surfacing in March, leading to project deferrals.
Order book compares well with Q3 despite the macro environment.
There have been no significant ramp-downs or cancellations.
FY26 is expected to be better than FY25 based on the order book and customer conversations.
Some certainty is likely to emerge in the near term, after which businesses may take cost or discretionary decisions.
The order book remains the only real visibility for now.
Increments and investments have impacted operating margins.
Fiscal 2026 margin guidance remains in the 26–28% range.
The current environment is expected to have some impact on operating leverage.
The uncertainty also presents opportunities, which the company will leverage from a cost optimisation standpoint.
Source: Earnings presser
The improving market sentiment and revival in discretionary spending was not sustained due to ongoing tariff discussions.
The company is observing delays in decision-making and project commencements.
Customer metrics remain resilient.
TCS reported strong order book closure at $12.2 billion for the quarter.
This is the second-highest order book in company history, despite no mega deals.
All major markets and industry verticals recorded growth.
The company is unable to specify the extent of degrowth from the BSNL account.
Calendar year 2025 is still expected to be better than 2024, based on the current order book.
Some short-term uncertainties are likely.
Market sentiment remained positive until February, but uncertainty crept in during March.
This led to delays in client decision-making, although no project cancellations were seen.
The company expects this uncertainty to settle in the coming months.
Source: Earnings presser
TCS has appointed Aarthi Subramanian as Executive Director – President & Chief Operating Officer for a five-year term, effective May 1, 2025.
She currently serves as Group Chief Digital Officer at Tata Sons, the principal investment holding company and promoter of Tata enterprises.
The company has also named Mangesh Sathe as Chief Strategy Officer, effective the same date.
The appointments were announced via an exchange filing.
Revenue came in at Rs 64,479 crore versus Bloomberg's estimate of Rs 64,837 crore.
Ebit stood at Rs 15,601 crore versus an estimate of Rs 16,141.2 crore.
Operating margin was at 24.19%, compared to the estimated 24.89%.
Consolidated net profit stood at Rs 12,224 crore versus an estimate of Rs 12,765 crore.
FY25 revenue at Rs 2,55,324 crore, up 6.0% year-on-year; 4.2% growth in constant currency.
Regional markets saw 37.2% growth year-on-year.
Energy, resources and utilities grew 5.1%; manufacturing grew 2.9%.
IoT/DE, enterprise solutions and AI.Cloud led growth among service lines.
Company reported strong and increasing traction in AI adoption.
Operating margin at 24.3%; net margin at 19.0%.
Total contract value at $39.4 billion for FY25 and $12.2 billion for the March quarter.
All major markets grew sequentially.
Source: Press Release
Total contract value in the March quarter at $12.2 billion.
Total contract value for FY25 at $39.4 billion.
Last 12 months IT services attrition at 13.3%.
Employee headcount at 6.08 lakh as on March 31.
Women make up 35.2% of the workforce, with employees from 152 nationalities.
The board has proposed a final dividend of Rs 30 per share for the financial year ending March 2025. The payout is subject to shareholder approval and will be disbursed five days after the 30th Annual General Meeting.
Revenue at Rs 64,479 crore vs Rs 63,973 crore, up 0.79%.
EBIT at Rs 15,601 cr vs Rs 15,657 crore, down 0.36%.
Margin at 24.19% vs 24.47%, down 27 bps.
Net profit at Rs 12,224 crore vs Rs 12,380 crore, down 1.26%.
Conversion of deal pipeline, retail and manufacturing verticals
Growth in financial services vertical
Outlook large deal ramp-up
Any projects cancellations or delays since January 2025 and its impact on FY2026 growth outlook
Loss of share to insourcing at large clients
USD revenue decline to be led by cross-currency headwinds.
Margin to remain flat QoQ as BSNL tailwinds to come with a lag
Revenue growth expected to be driven by BFSI and consumer
Offset by strong rebound in developed markets
In a recent report, LinkedIn named TCS among the top 25 companies to work for.
As of December 2024, the workforce at the company stood at 6.07 lakh, with IT attrition rate over the previous 12 months was 13%.
For the full list of companies picked by LinkedIn, click below:
Jefferies expects the high global uncertainty to limit the upside for IT stocks. The brokerage has picked Infosys Ltd., Coforge Ltd. and Sagility India Ltd. as its preferred stocks in the sector amid current volatility.
For the complete report, click on the link below:
Analysts at BNP Paribas picked Tata Consultancy Services Ltd. and Infosys Ltd. as its top buys from the IT services, as they are now trading at dividend yields close to their five-year peaks.
The observation comes as the former sector major gears up to release its March quarter earnings and US marcoeconomic situation raises concerns.
For our detailed report, click on the link below:
Along with the financial results for the quarter and fiscal ended March 2025, TCS will also declare the final dividend for the recently concluded financial year.
With its December quarter earnings, the IT major had announced a special dividend of Rs 66 apiece and an interim dividend of Rs 10 per share. The company's dividend yield of 1.69%.
Going into the fourth quarter results for TCS, macroeconomic conditions in the US will be focus as the country teeters on the brink of a probable recession. Revenue and margin are expected to be muted with business in developed markets staying soft and decline in revenue from BSNL.
For a detailed read into what analysts tracking TCS expect from the Q4 results, click on the link below:
For the March quarter, analysts expect TCS to post a 1.3% rise in revenue, against the previous quarter, while net profit is expected to rise around 2.6%.
Revenue: Rs 64,848.2 crore
EBIT: Rs 16,141.2 crore
Margin: 24.9%
Net Profit: Rs 12,765.95 crore
The North American market is expected to remain biggest contributor to TCS' revenue, accounting for nearly half of it and a value of Rs Rs 31,182.9 crore, as per estimates of two analysts.
The Tata Group's IT arm had met expectations in a seasonally weak December quarter, with positive management commentary and good deal wins headline the earnings print.
Revenue down 0.4% to Rs 63,973 crore (Estimate: Rs 64,749 crore).
EBIT up 1% to Rs 15,657 crore (Estimate: Rs 15,986 crore).
Margin at 24.5% versus 24.1% (Estimate: Rs 64,749 crore).
Net profit rose 4% to Rs 12,444 crore (Estimate: Rs 12,537 crore).
Tata Consultancy Services Ltd. is set to open the earnings season for the quarter and fiscal ended March 2025. The IT bellwether will announce its financial results for the period in a few hours from now.
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