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Tata Consultancy Services (TCS), India’s leading IT services provider, is set to unveil its Q4 FY25 results today, April 10, 2025, coinciding with a market holiday for Mahavir Jayanti. Alongside quarterly figures, TCS will also release its full-year earnings for the fiscal year ending March 31, 2025. Analysts project a subdued performance, with muted revenue and profit growth, while investor attention is firmly fixed on the company’s dividend announcement and its outlook amid uncertainties like US tariffs.
Mixed Sector Outlook Weighs on Expectations
The Indian IT sector is navigating a challenging landscape in Q4 FY25, marked by regulatory hurdles and macroeconomic headwinds. Analysts suggest that a weakening global economic environment could dampen TCS’s results and its guidance for FY26, aligning with broader sectoral trends of tempered growth.
TCS Q4 Revenue Projections
Kotak Institutional Equities estimates TCS’s revenue at ₹64,964 crore for the March quarter, reflecting a modest 1.5% sequential increase from ₹63,973 crore in Q3. However, in US dollar terms, revenue is expected to dip 0.5% to $7,502 million from $7,539 million, driven by a $30 million decline in BSNL project contributions and flat international business performance. In constant currency (CC) terms, a 0.3% quarter-on-quarter (QoQ) drop is anticipated. Nuvama Institutional Equities echoes this caution, forecasting a 0.2% CC revenue decline and a 1% drop in USD revenue, partially offset by a rebound in developed markets.
Steady Deal Wins, But Growth Concerns Linger
TCS is likely to report deal wins worth $11 billion, per Kotak Equities, down from $13.2 billion in the same quarter last year, which included significant renewals. Analysts will scrutinize the reasons behind sluggish international growth, attributed to project ramp-downs and moderate deal momentum, as a key indicator of TCS’s global competitiveness.
Profit and Margins Under Pressure
Net profit for Q4 is pegged at ₹12,663.6 crore by Kotak, a 2.3% rise from ₹12,380 crore in the prior quarter. Operationally, Earnings Before Interest and Taxes (EBIT) are projected to climb 3.5% to ₹16,198.5 crore from ₹15,657 crore, with EBIT margins improving by 46 basis points to 24.9%. However, Kotak warns that rupee depreciation benefits may be offset by increased spending on promotions and business investments, tempering margin gains.
Dividend Announcement in Focus
The TCS board is expected to propose a final dividend for FY25 today. In a regulatory filing, the company stated, “The Board of Directors will consider recommending a final dividend, if any, for the financial year ending March 31, 2025, for shareholder approval at the 30th Annual General Meeting.” Investors are eager for clarity, given TCS’s history of consistent payouts.
Key Areas to Watch
Analysts highlight several focal points in today’s results:
- US Tariffs and Macro Outlook: The impact of recent US tariffs and macroeconomic slowdown on TCS’s FY26 guidance will be critical, especially given its significant North American exposure.
- Developed Markets Performance: Reasons for underperformance, project delays, or cancellations since January 2025 will signal demand trends.
- Financial Services Vertical: Insights into this key segment, including potential insourcing risks, will be closely monitored.
- UK and Europe Spending: Signs of demand recovery in these markets could offset US challenges.
- Margin Strategies: TCS’s ability to protect and enhance margins amid rising costs will be a litmus test of operational efficiency.
TCS Share Price Context
TCS stock has faced headwinds recently, dropping 13% over the past month and over 20% in the last three months. On a one-year basis, it’s down more than 12%, though it boasts a strong 67% return over five years. On Wednesday, TCS shares closed 1.44% lower at ₹3,246.10 on the BSE, reflecting market caution ahead of the results.
Conclusion
While TCS’s Q4 results may lack fireworks with flat revenue growth and modest profit gains, the company’s commentary on navigating US tariffs, global demand, and its dividend decision will shape investor sentiment. As the IT giant kicks off the earnings season, its ability to offer a resilient outlook amid uncertainty will be paramount.
Disclaimer: Analyst projections reflect individual views and not necessarily those of Procapitas News. Investors should consult certified financial advisors before acting on this information.
