TCS Q3 Review - Healthy Topline Beats The Growth Concern; Headwinds Subsiding: KRChoksey
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KRChoksey Research Report
Tata Consultancy Services Ltd. Q3 FY22 performance was slightly higher than with our estimate. Dollar revenue was up 3% QoQ to $6,333 million (our estimate: $6,488 million). Rupee revenue grew by 4.3% QoQ to Rs 4,88,850 million (our estimate: Rs 4,4,86,591 million).
Reported operating margin contracted by 57 basis points to 25.0% led by supply side pressures of backfilling of attrition, increased sub-contracting costs, wage interventions to retain talent and discretionary costs.
Reported net profit grew by 1.5% QoQ to Rs 97,690 million (our estimate Rs 99,135 million) with margin of 20%.
TCS showed strength in its core business segment and has bagged large/mid-sized deals spread across verticals (no mega deals win in Q3).
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