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TCS Q3 Review - Growth Confidence Continues; Feels The Attrition Pain In Margins: Dolat Capital

TCS Q3 Review - Growth Confidence Continues; Feels The Attrition Pain In Margins: Dolat Capital

A cyclist rides past a signage for Tata Consultancy Services Ltd. outside the company’s Synergy Park campus in Hyderabad. (Photographer: Namas Bhojani/Bloomberg)
A cyclist rides past a signage for Tata Consultancy Services Ltd. outside the company’s Synergy Park campus in Hyderabad. (Photographer: Namas Bhojani/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

Tata Consultancy Services Ltd. reported revenue growth of ~4% QoQ in constant currency terms (our estimate: 3.2%) led by strong traction across verticals (Europe recovered).

Operating profit margin declined by 57 basis points QoQ to 25% (our estimate: 25.7%) due to increased sub-con, backfilling costs, training-recruitment and supply-side inflationary challenges. Announced dividend per share of Rs 7 and buyback of Rs 180 billion at Rs 4500/share.

Total contract value wins were modest at $7.6 billion (flat QoQ) given the current robust demand environment.

The trailing twelve months TCV marginally increased to $32.5 billion with 1.3 times revenue coverage. TCS highlighted that the miss was on account of long-cycles and infrequencies of mega deals. 

Click on the attachment to read the full report:

Dolat Capital TCS Q3FY22 Result Update.pdf

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