TCS Q2FY24 Earnings: What to expect

Tata Consultancy Services (TCS), is set to unveil its Q2 FY24 results post market hours today. These results hold significant importance as they are the first since the recent leadership changes under new CEO K Krithivasan.

Restructuring Impact: TCS restructured its internal verticals and appointed new leaders during this pivotal quarter. This marks the most prominent leadership shuffle under the new CEO, and investors are keen to see its impact.

Revenue and EBIT: Initial forecasts from ET NOW suggest TCS may report revenue of $7,270 million, a slight 0.6% increase from the previous quarter. In Indian rupees, revenue is expected to hit Rs 60,160 crore, up 1.3%, with an improved EBIT margin at 23.6%, up by 40 basis points.

PAT and CC Growth: Profit after tax (PAT) is predicted to remain stable at Rs 11,095 crore. Expectations for constant currency (CC) growth stand at 0.6% this quarter. One reason for enhanced margins in Q2 is the absence of wage hikes seen in the previous quarter.

Robust Deal Bookings: Experts anticipate strong deal bookings for TCS, following significant deals with BSNL and JLR.

Share Buyback: Besides financial results, investors are closely watching TCS's decision on a share buyback. High retail participation might lead to a lower acceptance ratio for shareholders. Assuming TCS sets a buyback price with a 20% premium and an acceptance ratio of around 25%, investors could realize approximately 5% gains.