TCS Q3 Review - A Mixed Bag Result; Revenue In-line But Margins Decline: Axis Securities
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Axis Securities Report
Tata Consultancy Services Ltd. reported a 4.3% revenue growth QoQ in Q3 FY22 in rupee terms, much in line with our expectations. The company’s revenues stood at Rs 48,885 crore, up 16.3% YoY and 4.3% QoQ.
While its operating profit stood at Rs 13,237 crore, the company’s operating margins declined 60 basis points QoQ to 25.0%, led by its lower service mix and higher subcontracting cost in the quarter.
The management commentary on the verticals banking, financial services and insurance, hi-tech media, life sciences and retail was positive and it expects TCS to report double-digit growth in FY22.
Deal-wins for the quarter continued strong, were spread across verticals, and stood at $7.6 billion, reporting a robust growth of 17% YoY. The sales cycle and execution of smaller deals continues to be faster as compared to large deals.
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