TCS Q3 FY25 Results: Revenue Growth, Margin Expansion, and AI Innovation in Focus
Tata Consultancy Services Limited, India’s largest IT firm, is expected to release its consolidated Q3 results for FY 2022-25 on 9 January next year. The YoY revenues are expected to be between ₹63,710 crore and ₹64,500 crore, implying a YoY growth of between 5.2% and 6.4%. The projected increase is attributable to the sector’s recovery in the banking, financial services and insurance (BFSI) sector, which contributes to revenue.
Operating performance metrics are expected to depict a better picture with further enhancement in the EBIT margin of approximately 24.5% YoY, an improvement of about 110 bps. Pundits have attributed this increase to operational improvements, beneficial movements in foreign exchange, and no increase in wages during this period. But certain brokerages like HDFC Securities believe that the margin can be reduced by as much as 80 bps due to furloughs and BSNL revenues slowing down.
Deal Pipeline and Business Segments Under Scrutiny
In Q3FY25, TCS emerged with a new large deal during the year with the Bank of Bhutan, Telenor Denmark Bank of Baroda and other banks. However, some analysts have reported a seasonal slowdown in the overall pipeline even when there is a high deal activity. It has been estimated that the company’s deal for the quarter is $ 9- 10 billion through which the company can lead the large-cap IT sector in terms of contract win.
The BFSI segment is anticipated to continue to perform well, while the manufacturing segment and the markets like Europe are expected to pose some risks. Management discussions on mega deals and the outlook for demand are two areas where the focus of analysts’ interest will be concentrated.
Impact of Furloughs and AI Developments
The IT industry and other corporate segments often offer furloughs in the months leading up to the New Year; thus, it could affect the sequential revenue growth of TCS. Further, there could be a reduction in revenues from contribution from the BSNL deal, though the operating margin could improve on the back of operational integration.
TCS’s further progress in generative AI (GenAI) will also be discussed as the company expands AI-driven tools into its services and products. Knowledge about its AI advance will offer important information about the company’s work on new technologies and its potential for industrial growth.
🚨 TCS Q3 FY25 results are on the horizon! With projected revenue growth of up to 6.4% and an EBIT margin boost, all eyes are on India’s IT giant. From major deal wins to advancements in generative AI, TCS is setting the stage for innovation and growth. Stay ahead of the curve with the latest updates. 💼📈 #TCSResults #ITSector #RevenueGrowth #Innovation #BFSI
