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Monday, September 26, 2022

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Analysts Cautious Even As Deal Wins Drive Revenue Growth

Tata Consultancy Services Ltd.’s revenue rose on deal wins but analysts are cautious as margin pressure persists and the company hinted at recession worries among clients.

The company’s revenue rose 4.28% sequentially to Rs 52,758 crore in the first quarter. The largest Indian IT services company saw its EBIT margin contract to 23.1% in the quarter ended June from 24.96% in the preceding three months.

The company won new deals worth $8.2 billion in April-June period compared with $11.3 billion in Q4. “This quarter the company won a “couple of $400 million and other medium deals,” Chief Operating Officer N Ganapathy Subramaniam said.

It net added 14,136 employees during the quarter.

Key Q1 Highlights (QoQ)

  • Net profit fell 4.5% to Rs 9,478 crore

  • Operating profit fell 3.5% to Rs 12,186 crore

  • Revenue in dollar terms rose 1.3% to $6,780 million

  • Revenue growth in constant currency terms stood at 3.5% sequentially.

Here’s what brokerages have to say about TCS’ Q1 performance:

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