Tata Consultancy Services Ltd recently informed the exchanges that the company’s board of directors will meet on April 12, 2024 to discuss and approve its audited independent financial results for the year ending March 31, 2024, prepared in accordance with Indian Accounting Standards- Standards. (Ind AS). TCS Board will further approve and file the audited consolidated financial results of the company and its subsidiaries for the year ending March 31, 2024, as reported under Ind AS.
TCS board will also recommend final dividend, if any, on the equity shares of the Company for the fiscal year ending March 31, 2024.
The dividend expectations remain strong as at the end of the year before fourth quarter TCS stated ₹24 stock as dividend taking total dividend to ₹69 for FY23. At the end of the quarter of December’23, TCS declared a dividend of ₹18 translating to a dividend yield of 1.78%.
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Caution prevails on IT sector
The IT companies are likely to feel growth challenges during the January to March quarter of 2024 as well. The rate of attrition recovery remains slow and there is continued pressure on discretionary IT spending. Accenture’s leadership cut has already added to investor and analyst concerns.
Analysts predict that Q4FY24 will be a moderate quarter with muted growth, albeit the same in line with expectations and the stock factor.
Analysts at Nuvama Institutional Equities in their Q4 preview said that “Revenue growth is likely to be between -1.5% and +4.5% dragged by a gradual reversal of furloughs and lower discretionary spending on technology”.
TCS better placed
However, Tata Consultancy Services (TCS) is likely to see some revenue growth. on a sequential basis.
Analysts at Jefferies India Pvt Ltd in their results preview said that “Total revenue growth in 4QFY24 should remain weak at 0.3% sequentially in constant currency terms, with only TCS and Coforge likely to post sequential growth.
TCS according to Jefferies is likely to report 1.4% sequential growth in earnings on a sequential basis in constant currency terms. This will be driven by agreements.
Analysts at Nuvama also expect TCS along with a few others to report modest growth (1.0%-2.5%).
JM Financial analysts expect constant currency, sales growth to come in at 1%, which coupled with 30bps cross-currency headwinds, will mean revenue growth of 1.3% sequentially.
Meanwhile the treatment flows can also keep edges stable while lower wear can actually lead to some improvement in the edges.
JM Finanial analysts expect 20bps sequential and 70bps year-on-year expansion in EBIT margin to 25.2% led by better utilization and lower expenses, offsetting lower margins. Net profit is likely to grow 5.3% per year although flat on a sequential basis.
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Focus to shift to FY25 Outlook
As deal gains are likely to remain strong for TCS. The entire focus will however be FY25 outlook).
The demand outlook and the CY24 budgets should be the main topics of discussion said analysts. Demand recovery is likely to be TCS’ top priority, especially in the BFSI vertical.
Analysts at Jefferies said that “FY25 revenue growth guidance ranges may be lower than expected, which could lead to earnings shocks for IT companies”
However those at Nuvama said that “They expect FY25 revenue growth to be moderately better than FY24 – laying the foundations for a strong FY26 for IT companies”.
The retail and high-tech industries are expected to rebound first, while manufacturing continues to be strong.
Disclaimer: The opinions and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions
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Published: 03 Apr 2024, 17:06 IST