TCS Q1 Results 2024 Highlights: With the likes of Tata Elxsi, GM Breweries, and many others having already released their earnings for the quarter that ended June 30, 2024, the Q1 earnings season has started and will be in full swing in the coming days. Market Participants were today keen on the performance of players like Tata Consultancy, NELCO, GTPL Hathway, GNA Axles, AKME Fintrade, Amal, DRC Systems India, SM Auto Stamping, Vivid Mercantile, among others. Meanwhile, the street keept a watch on how stocks performed for the companies that have already released their earnings for the period.
The week will witness announcements from the likes of HCL Technologies, IREDA, Oriental Hotels, Avenue Supermarts, among others
TCS Q1 Results 2024 Highlights: TCS, NELCO, Anand Rathi Wealth reported earnings
"Tata Consultancy reported its first quarter earnings and looks like it is beating street estimates," said Prashanth Tapse, Senior Vice President of Research at Mehta Equities. The net income stood at Rs 12,04o crore, up 8.8% on year, vs estimate of Rs 11,959 crore rupees by Bloomberg Consensus while revenue stood at Rs 62,610 crore, up 5.4% on year vs estimate of Rs 62,128 crore witnessed slower rate. All major markets and verticals have returned with sequential growth. "Overall the frontline numbers look like the worst is behind us and we may see revival in the IT sector from Q1 earnings.
Technically TCS is trading significantly above its anchor VWAP support mark of 3900.00 on its daily time frame charts. With the stock making higher highs and remaining well above its immediate support level, it appears poised to reach the 4030.00 and 4050.00 levels. The RSI (14) around 51 indicates potential momentum in the upcoming sessions. We advise traders to maintain a strict stop loss at 3875.00, aiming for potential targets of 4030.00 and 4050.00," said Tapse.
K Krithivasan, Chief Executive Officer and Managing Director of TCS said that the company had reported all-round growth across industries and markets in Q1. The company is also "continuing to expand client relationships, create new capabilities in emerging technologies and invest in innovation, including a new AI-focused TCS PacePort in France, IoT lab in the US and expanding our delivery centers in Latin America, Canada and Europe.”
TCS' revenue from operations stood at Rs 62,613 crore in Q1 of FY25, compared to Rs 59,381 crore it posted in the corresponding period last fiscal. The company's revenue grew 5.4% on year in Q1 of FY25.
The tech services giant reported a net profit of Rs 12,105 crore in Q1 of FY25 against Rs 11,120 crore it reported in the same period a year ago, a growth of 8.85% on year.
TCS will pay an interim dividend of Rs 10 per equity share to its investors. "We would like to inform you that at the Board Meeting held today, the Directors have declared an interim dividend of ₹ 10 per Equity Share of ₹1 each of the Company," said the company.
"The interim dividend shall be paid on Monday, August 5, 2024, to the equity shareholders of the Company, whose names appear on the Register of Members of the Company or in the records of the Depositories as beneficial owners of the shares as on Saturday, July 20, 2024, which is the Record Date, fixed for the purpose," it said in an exchange filing.
On an average, it is expected that large cap tech companies like TCS, Infosys are going to deliver a steady growth in Q1 numbers. Even traditionally, Q1 tends to showcase better performance compared to Q4 of the previous fiscal. Lower instances of deal cancellations is seen as one of the key factor for this.
TCS’s earnings before interest and tax (Ebit) margin is expected to contract due to wage hikes implemented in Q1 FY25, despite the positive revenue outlook. “We expect TCS’ Ebit margin to contract by about 150bps QoQ, largely due to wage hikes,” said the brokerage firm Motilal Oswal. ICICI Securities anticipates a steeper decline of 186bps QoQ, attributing it to higher employee costs and wage hikes effective from April 1, 2024.
"We expect Defence companies to report healthy number backed by strong opening order book and continued execution momentum. We expect BEL to report revenue growth of 10.5% YoY, (opening order book of INR 759mn), and EBITDA margins to expand 30bps YoY to 19.2%. While for Data Patterns we expect revenue growth of 12%, with EBITDA margins expanding 370bps YoY, driven by execution of high margins contract. Due to elections in month of April and May, order inflows might see some softness. BEL reported YTD order inflows of Rs 48 billion. Though we expect pickup in order inflows from 2H of FY25," said JM Financial on defence companies Q1 results expectations.
The country’s largest IT service provider, Tata Consultancy Services (TCS) is likely to report a steady growth in the April-June quarter driven by factors such as deal ramp-ups — including the pivotal BSNL deal — and sector-specific performance, multiple brokerage reports said.
The average of five brokerage firms expect TCS’s revenue to rise 1.5% sequentially to Rs 62,155.5 crore during the period.
Tata Consultancy Services reported a growth of 9.3% on year in its net profit of Q4 FY24 standing at Rs 12,502 crore against Rs 11,436 crore it posted in the same period a year ago. The IT services company reported a revenue increase of 3.5% on year to Rs 61,237 crore compared to Rs 59,162 crore.
On Wednesday, Kesoram Industries reported a net loss of Rs 62 crore int he first quarter of FY 25 against a not loss of Rs 32.4 crore in the corresponding quarter. The company's revenue from operations declined 12% to Rs 879 crore against Rs 999 crore in the corresponding period of the preceding fiscal. The company's EBITDA dropped 46.2% to Rs 70.9 crore in the first quarter of this fiscal over Rs 131.7 crore in year-ago period.
On Wednesday, Tata Elxsi reported a decline of 3% in net profit standing at Rs 184 crore in the first quarter of FY25 against Rs 188 crore reported in the same period a year ago. The company's revenue from operations grew 9% on year to Rs 926 crore in the quarter ending June of FY25 against Rs 850 crore it reported in the corresponding period last fiscal. Tata Elxsi's Ebitda came in at Rs 225 crore, a fall of 3.6% on year from Rs 233.7 crore a year ago.
"We retain our US Dollar revenue/EBIT (Rsm)/PAT (Rsm) growth rate of 12.1%/15.8%/14.2%, respectively, over FY24-27 and retain our discounted cash flow or DCF-based target price of Rs6,064, implying a target P/E of 37.4x FY26F EPS, a 10% premium to the peer group (LTTS, Tata Technologies, KPIT Technologies and Cyient) average of 34x FY26F consensus EPS, considering the superior margin profile & return ratios. Changing dynamics in the automotive sector, rising competitive intensity, and moderating demand leading to a focus on profitability and moderation in spending intensity support our thesis," said InCred Equities after Tata Elxsi released its Q1 FY25 results.
The brokerage firm has maintained the "Reduce" rating on the stock. However, it reduced the target price to Rs 6,064 from Rs 7,119.