Indiastockguru Team
Tata Consultancy Services (TCS) reported mixed results for September Quarter 2024. While revenue momentum continued with 7% YoY growth, margins contracted 0.2% YoY and order book or total contract value fell 23% YoY.
TCS stock price has fallen nearly 1.8% since the Q2FY25 results were announced yesterday. Clients maintained their cautious stance and discretionary spend continued to be impacted. Clients prioritized initiatives accelerating customer acquisition, modernizing digital core including ERP platforms and regulatory compliance. Speaking on Q2FY25 results, K Krithivasan, Chief Executive Officer and Managing Director at TCS said: “We saw the cautious trends of the last few quarters continue to play out in this quarter as well. Amidst an uncertain geopolitical situation, our biggest vertical, BFSI showed signs of recovery. We also saw a strong performance in our growth markets. We stay focused on sharpening our value proposition to our clients, employees and other stakeholders”.
In the Q1FY25 earnings press conference, the management had indicated that the Q2FY25 order book would be higher as a number of projects which were pushed back by certain weeks in Q1FY25 will be materialized later. While the total contract value (TCV) is within the management’s comfort zone of $7-9 billion, it is lower than the $13.2 billion threshold it touched in March Quarter 2024.
BFSI, the largest vertical of TCS with 31% revenue mix reported stable growth with 0.1% YoY constant currency growth in Q2FY25. In geographic revenue mix, North America revenue growth decelerated 2% YoY constituting 48% of revenue mix in September Quarter 2025. Operating margins at 24.1% fell 20 basis points (bps) YoY and 60 bps sequentially in Q2FY25.
