13-04-2024 02:06 PM | Source: StoxBox
Views on Tata Consultancy Services Ltd. (TCS) Q4FY24 by Dhruv Mudaraddi, Research Analyst, Stoxbox
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Below the Quote on Views on Tata Consultancy Services Ltd. (TCS) Q4FY24 by Dhruv Mudaraddi, Research Analyst, Stoxbox
TCS has displayed modest growth in a muted macro environment and has yet again set the operational performance standard for the rest of the large-cap pack to follow. The mega deal at Aviva will continue to yield better utilization levels and margin accretive growth going forward until the first half of FY25. The order book has seen consistent growth to record levels which sets TCS apart and we’ll continue to see this benefit its growth trajectory. The quarter completes one year for the new management and the continuity and benefits from that are now bound to show in the coming quarter extending the operational improvements that we have already seen. Since the IT spending budgets have been finalized by the end of March, we expect an uptick in deal acquisitions and project ramp-ups commencing in Q1FY25, thus reinforcing TCS's optimistic outlook.
Tata Consultancy Services Ltd. (TCS) Q4FY24 Result First Cut – Promising growth led by deal wins and efficient management
- Revenue rose 1.1% QoQ / 2.5% YoY in rupee terms to Rs. 61,237 crores, marginally below market estimates of Rs. 61,451 crores. This growth can be attributed to a strong rise in India revenue (up 37.9%), a revival in the UK business (up 6.2%), and the Regional markets vertical (up 9.7%).
- EBIT grew 5% QoQ and 9.9% YoY to Rs. 15,918 crores, surpassing market expectations of Rs. 15,544 crores. The EBIT margin expanded to 26% (up 98 bps QoQ /up 151 bps YoY) owing to cost-cutting efforts and lower subcontracting costs.
- Net income stood at Rs. 12,240 crores (up 12% QoQ /up 8.7% YoY), crossing market estimates of Rs. 12,034 crores. The PAT margin expanded to 20.3% (up 199 bps QoQ / up 97 bps YoY).
- LTM attrition trended downwards to 12.5% in Q4FY24 compared to 13.3% in Q3FY24.
- Order book recorded for FY24 was at USD 42.7 billion and for Q4FY24 at USD 13.2 billion, both an all-time high led by the mega deal with Aviva and other deals in the emerging markets vertical.
- The board of directors has recommended a dividend of Rs. 28 per equity share.
- Net cash from operations at Rs 12,931 which is 100.4% of net profit.
- TCS reported a workforce of 601,546 employees as on March 31, 2023.
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