Indiastockguru Team
Tata Consultancy Services (TCS) reported revenues of Rs 62,613 crore up 5.4% YoY and with 2.25% growth sequentially. Constant currency growth stood at 4.4% YoY in June Quarter 2024. In dollar terms, revenues stood at $ 7,505 million with growth of 4.4% YoY in Q1FY25. Markets were expecting a mid-single digit revenue growth and the estimates did hold good.
Revenue growth YoY of 5.4% in Q1FY25 for TCS is the highest over the past three quarters. Revenue growth YoY stood at 4% and 3.5% YoY in Q3FY24 and Q4FY24 respectively. All markets except North America reported positive revenue growth in Q1FY25. North American market is the largest contributor, nearly 50% of TCS revenue mix in June Quarter 2024.
Banking, financial services and insurance (BFSI) revenue growth improved in Q1FY25. BFSI is the largest revenue contributor (30.9%) to TCS revenue basket. The TCS management had indicated in the past quarter that BFSI vertical is witnessing pent-up demand and will gradually revert back to growth.
Operating margins came in at 24.7%, expanding 150 basis points YoY but with a fall of 130 bps QoQ mainly due to wage hikes undertaken from April 2024.
While the headline numbers look resilient, the investors keenly watch total contract value (TCV) or order book of the company as it indicates future revenue growth potential. TCV has fallen 19% YoY to $ 8.3 billion in Q1FY25.
North America TCV stood at $4.6 billion, BFSI TCV at $2.7 billion and consumer Business TCV was at $1.1 billion in Q1FY25. The company added three clients in the $100 million revenue category, three in the $50 million category and 18 clients in $10 million in June Quarter 2024.
