Stock Market Update: TCS Q3FY25 Results Preview and Expert Insights
Tata Consultancy Services (TCS), the IT giant, is set to announce its Q3FY25 earnings results today, and investors are eagerly awaiting insights into the company’s performance. Analysts have shared their expectations for the results and offered strategies for trading TCS stock ahead of the announcement.
What Analysts Expect from TCS Q3FY25 Earnings
Revenue Growth Forecast
Anshul Jain, Head of Research at Lakshmishree Investment and Securities, anticipates year-on-year (YoY) revenue growth of 5.2% to 6.4%, placing the topline in the range of ₹63,710 crore to ₹64,500 crore.
- EBIT Margins: Jain projects an expansion of 110 basis points YoY and 40 basis points sequentially, estimating EBIT margins at 24.5%. This improvement is attributed to operational efficiencies.
- Strong Deal Pipeline: The company is expected to report $9-10 billion in contract wins for the quarter. The BFSI sector is likely to remain a key growth driver.
However, Jain cautioned that challenges in the UK/Europe markets and the manufacturing sector could pose risks to future performance. He noted that TCS’s Q3 performance will serve as a barometer for the resilience of the IT sector in a volatile macroeconomic environment.
Muted Revenue Growth Due to Furloughs
Sagar Shetty, Research Analyst at StoxBox, expects a relatively subdued revenue performance for TCS in Q3 due to the impact of furloughs.
- BSNL Deal Tapering: Shetty highlighted that the reduced revenue contribution from the BSNL deal could weigh on overall revenues. However, this may also result in improved EBIT margins, thanks to reduced dependency on the deal.
- Additional Margin Drivers: Margins are likely to benefit from operational efficiencies, currency tailwinds, and the absence of wage hikes (the last hike occurred in Q1FY25).
- Key Watch Areas: Shetty emphasized the importance of management’s commentary on the deal pipeline, particularly in the mega-deal segment, and insights into the broader demand environment.
What Q3FY25 Results Mean for Investors
The Q3FY25 results will provide critical insights into TCS’s ability to sustain growth amid global macroeconomic uncertainties. With strong deal momentum but sectoral challenges, the results could signal the IT sector’s trajectory in the coming quarters.
Trading Strategy for TCS Shares
For traders, Mahesh M. Ojha, AVP—Research at Hensex Securities, recommends a buy-on-dips strategy for TCS stock:
- Buy Range: ₹4,060 to ₹4,085 per share.
- Stop Loss: ₹3,980 per share.
- Target Levels: Short-term recovery could see TCS shares bounce back to ₹4,160, ₹4,200, and ₹4,250.
What to Watch in Q3FY25 Results
- Revenue performance, especially the impact of furloughs and mega deals.
- Updates on the $9-10 billion deal pipeline and any changes in contract momentum.
- Management’s outlook on demand trends in BFSI, manufacturing, and key international markets like the UK and Europe.
- EBIT margin improvements due to operational efficiencies and currency tailwinds.
TCS Stock Overview
As of now, TCS shares are trading around ₹4,100 levels. The results announcement could create market volatility, making it essential for investors to carefully evaluate entry and exit points.
Stay tuned for live updates and detailed analysis post-results.
