TCS Q3 Results Review - Deal Wins Muted, Hope Intact; Cost Optimisation Continues: Dolat Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.Tata Consultancy Services Ltd. reported 1.2% revenue growth in constant currency terms (our estimate: +1.1%) led by sustained QoQ traction in manufacturing (+2.2%), energy and utility (+2.8%) and regional mkt (+12.9% – led by BSNL deal). Decline in key verticals (banking, financial services and insurance -1.8%; retail -0.3%) continued. Adjusted operating profit margin up 70 basis points QoQ at 25% (our estimate: 24.8%), led by 60 bps from productivity and realisation, 70 bps from sub-con optimisation, 25 bps forex offset by 80 bps headwinds from third-party expense and furloughs. Operating profit margin gains were effectively led by further reduction in headcount by 1% QoQ. Total contract value wins stood at $8.1 billion taking trailing twelve months TCV to $39.5 billion (up 11.6% YoY). Management pointed deal wins remain healthy and ramping up as planned. Company is also estimating of pent-up demand building up in few segments. TCS' results were largely non-event both from current quarter as well as outlook perspective on demand environment. However, improved focus on OPM optimisation is driving up some earnings growth. Maintain 'Reduce' rating with target price of Rs 3,750 valued at 25 times on FY26E earnings per share (implies three times on PEG basis)..Click on the attachment to read the full report:.TCS Q3 Results: Revenue Up 1.5%, Net Profit Meets Estimates Despite Headwinds.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

TCS Q3 Results Review - Deal Wins Muted, Hope Intact; Cost Optimisation Continues: Dolat Capital

TCS' results were largely non-event both from current quarter as well as outlook perspective on demand environment.

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