Despite weakness in key international markets, IT major TCS is expected to report modest improvement in numbers in the March quarter of FY24, led by ramp up in large deal wins including the BSNL deal. 

Experts expect TCS’ revenue growth to be in the low single digit quarter-on-quarter (q-o-q) in constant currency terms. EBIT margin may remain stable even as operational improvements and cost efficiencies would be offset by low margins in the Indian business.

Apart from the key numbers, trends on deal wins, attrition and management commentary on near-term demand will be under focus.

Brokerage firm Motilal Oswal Financial Services expects TCS’ deal pipeline to remain resilient in the UK regions, but the US and Europe may continue to stay weak.

As per Motilal’s estimates, TCS may report a 2.2 per cent q-o-q growth in constant currency (CC) terms while EBIT margin may be stable, as operational improvements should be compensated by low margins in the India business.

For Q4FY24, TCS may report a 5 per cent year-on-year growth in overall revenue and an 8 per cent growth in reported PAT, according to Motilal Oswal.

Dhruv Mudaraddi, a research analyst at StoxBox said TCS’ CC revenue growth may be in low single digits q-o-q. He expects the deal flow should continue to be robust.

“Any strategic plans under the new CEO, insights on IT budgets in 2024, near and medium-term demand outlook in the US and Europe, pricing environment in key markets and segments and updates on the large/mega deal pipeline would be key monitorable,” said Mudaraddi.

CA Vatsal Vinchhi, an equity analyst for the IT sector at Choice Equity Broking expects a marginal sequential growth for TCS on the back of a strong order book in the BFSI segment.

“It is expected to report about 1 per cent CC q-o-q growth amidst delayed discretionary spending. Margins are expected to remain resilient and to be in the range of 24-25 per cent, however, the aspirational range is 26-28 per cent going ahead,” said Vinchhi.

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