INSUBCONTINENT EXCLUSIVE:
For a traditionally weak Q3 quarter, Indias biggest IT services and innovation firm Tata Consultancy Services (TCS) managed to report a
strong efficiency, even as the impact of a tough global macroeconomic environment appeared on deal circulations
For Q3FY23, TCS reported 11 percent year-on-year (YoY) development in net revenue, which stood at Rs 10,846 crore
Earnings for the quarter was available in at Rs 58,229 crore, up 19.1 per cent YoY in reported terms and 13.5 per cent YoY in consistent
Sequentially, revenue was up 5.2 per cent
TCS beat the Bloomberg price quote on revenue (Rs 57,207 crore), the business could not satisfy the net revenue expectation (Rs 11,064
Development for the quarter was broad-based in regards to both location and verticals and it was additional moved by cloud demand and market
However, the business did not measure the cloud momentum
TCS does not give assistance but the management said that it is confident about the need circumstance
It further said innovation spends are undamaged
This quarter in terms of need has actually had to do with different markets acting in a different way
North American need continues to be dynamic
The UK is a challenging operating environment, and Europe is the only market where decision-making is getting impacted due to the existing
geopolitical challenges, stated Rajesh Gopinathan, CEO and MD, TCS
Gopinathan stated: Looking ahead and beyond existing uncertainties, our longer-term development outlook stays robust
The ongoing global unpredictability did have a major impact on TCS Q3 performance
Overall contract worth (TCV) came in at $7.8 billion, though it was in the middle of the firms $7-9 billion variety
TCS handled to maintain its TCV above $8 billion over the past three-four quarters
The book-to-bill was 1:1, whereas it was 1:2 in the previous quarter
While the management did not provide clearness on spending plan for FY24, it repeated that the deal pipeline, up until now, has not been
The total need scenario has actually not changed considerably
We did see furloughs impact this quarter
So far nothing to call out as a concern, stated N Ganapathy Subramaniam, COO and executive director, TCS
Analysts, however, were divided on how to examine the reported numbers
Sanjeev Hota, head of research study, Sharekhan by BNP Paribas, stated: Management commentary on demand environment looks hazy for brief to
medium term, owing to the unpredictable international environment
At the present juncture, owing to multiple global headwinds, the outlook for FY24 looks uncertain, but the recovery could be gradual in the
Structural development story for the Indian IT sector stays undamaged, and TCS being the flagbearer will emerge stronger
Regardless of near-term volatility, we stay positive on TCS for the long term
TCS revenues keep momentum in the seasonally weak quarter
Offer wins TCV at $7.8 billion, 2.6 percent development YoY, was a little soft mainly due to lukewarm activity outside the United States and
We will await management talk about whether this weak point was manipulated or broad-based outside the US, said a very first cut note from
On the margin front, the business reported an operating margin at 24.5 per cent
The margin had a 70-basis point favorable effect of forex; execution effectiveness brought in favorable 30 basis points
However these were balanced out by higher third-party expenses and the impact of the return to normalcy
Samir Seksaria, CFO, TCS, said he was confident that the company would exit FY23 with a margin of 25 per cent
He also acknowledged that the elevated expectation on incomes has boiled down and the supply-side restrictions have actually eased
