Stock Market Today: Following the announcement of the dividend and the release of the Q3 results after market hours on Thursday, the share price of Tata Consultancy Services (TCS) increased by almost 4% in morning trading on Friday. The company’s net profit increased by 12% year over year.
Stock Market Today: Following the release of the Q3 results after market hours on Thursday and the declaration of dividends, the share price of Tata Consultancy Services (TCS) increased by more than 4% in Friday early trading.
FY25 TCS Q3 Results The Indian IT giant Tata Consultancy Services (TCS) announced a 12% increase in its consolidated net profit for the December quarter, from ₹11,058 crore to ₹12,380 crore, compared to the same period last year.
Jefferies thinks values are attractive and maintains estimates.
TCS’s 3Q results matched Jefferies India Pvt Ltd’s projections. According to Jeffereis analysts, management’s remarks regarding the positive order book and early indications of a recovery in discretionary spending, particularly in North America BFSI, gave them hope. Additionally, the BSNL deal’s ramp-down can offer opportunities to increase margins. For FY25–27, Jefferies maintains its earnings projections and anticipates a 9% growth in earnings per share (CAGR). According to Jefferies India Pvt Ltd, the value at 27 times price to earnings is appealing and takes into account the short-term growth hurdles.
Views of other analysts
The IT giant posted a respectable year-over-year increase in its financials despite a seasonally difficult quarter. However, according to Sagar Shetty, Research Analyst at StoxBox, the company fell short of the street predictions on all fronts, albeit by a little margin. The company failed to meet its target margin range of 26-28%, which now appears even more ambitious to meet as the fiscal year draws to a close. The solid TCV (total contract value) of $10.2 billion (up 26% YoY) was a major tailwind during the quarter. This highlights a healthy revenue visibility because, according to Shetty, it is unlikely that any deals will leak in the future. Manufacturing IT operations, managed services, operating model transformation, vendor consolidation, CX transformation, legacy modernization, and Gen AI-led transformation were among the winning themes in several significant acquisitions. expanding was driven by expanding markets, and CBG (Consumer Business Group) and BFSI saw significant revival. The TMT industry is still on the decline, and life sciences is now following suit. We continue to be positive about the company’s prospects due to the recovery in discretionary spending in certain verticals. It would be crucial to know how management views the demand situation after the US administration change, the deal pipeline, and margin projections.
Head of Research at Lakshmishree Investment and Securities, Anshul Jain The company is nevertheless well-positioned for long-term, steady growth in the cutthroat IT sector by concentrating on reducing attrition and increasing profits. The biggest exporter of IT services in India, TCS, reported a net profit of ₹12,380 crore in Q3 FY25, up 4% from the previous quarter and 12% from the previous year. The quarter’s revenue of ₹63,973 crore was a 6.13% increase over the previous year but a minor 0.4% decrease from the previous quarter. Another factor contributing to income slippage was the Indian National Rupee’s (INR) depreciation versus the US dollar (USD). Jain stated, “I anticipate some buying buzz in TCS share in every dip following Q3FY25 results.
Technical Perspective
The price of TCS’s shares has established a solid foundation at ₹3,980 per share, and the technical chart pattern indicates that the stock is doing well. Therefore, Mahesh M. Ojha, AVP—Research at Hensex Securities, encouraged TCS shareholders to hold the shares for the short-term targets of ₹4,150 and ₹4,250. Additionally, he stated that new investors might purchase TCS shares at the current market price with a strict stop loss of ₹3,980 per share.
Announcement of Dividends
TCS announced a special dividend of ₹66 per share of Rs1 face value each, in addition to a third interim dividend of Rs10. Each share will receive a total dividend of ₹76.
The third interim dividend and the special dividend will be distributed to the company’s equity shareholders on Monday, February 3, 2025, even though the record date for this dividend distribution is set for Friday, January 17, 2025.
