TCS Share Price: Tata Consultancy Services (TCS) Ltd. shares were the top losers on the Nifty 50 index, trading with losses of over 1.5 per cent. The stock is also the biggest contributor to the Nifty 50 downside on Thursday. This comes after the IT giant reported lower-than-expected revenue for the July-September quarter.
Most brokerage firms now await to see the strong deal wins translate into revenue growth, however, a few expect it to be pushed on to FY25, dragged by the weak macro environment.
“The second half of FY24 is unlikely to see a V-shaped recovery for TCS as the bulk of the benefit of the ramp-up of large deals will only be visible in FY25,” brokerage firm HSBC stated in its report.
Bernstein also agrees as it feels the strong deal wins for TCS set the platform for growth in FY25. Nomura also shares similar views and believes that the near-term visibility for TCS remains low despite its order book holding up.
Adding to the list, Motilal Oswal Financial Services also pegged its growth expectations from TCS from FY25. “We continue to expect TCS to deliver superior growth in FY25 driven by its leadership in cost efficiency, which has led to strong deal inflows in recent quarters,” the firm stated.
Jefferies cut the company’s constant currency revenue growth forecast for financial year 2024 by 70 basis points to 4.3 per cent year-on-year, Citi lowered the same estimate to 3.5 per cent year-on-year.
Out of the 46 analysts that track TCS, 24 have a “buy” rating, 13 say “hold,” while nine of them have a “sell” rating.
TCS headcount fell by 6,333 during the September quarter, the most in two decades.
CEO K Krithivasan said that while the company continues to hire, the number of people hired are less than the number who left.
“There was no need to hire so many people and hence the headcount was down,” the CEO said.
Stock Price History
The stock has gained almost 15 per cent in the last 1 year and 9 per cent in 2023 YTD. In comparison, the Nifty IT index has gained over 16 per cent in the last 1 year and over 12 per cent in 2023 YTD.
In the 10 months of the current calendar year so far, the stock has given positive returns in 7 months and negative in 3. It is up around a percent in October extending gains after a 5 per cent rise in September. Before this, it shed around 2 per cent in August.
Meanwhile, the stock was also in the green for 4 straight months between April and July. Before that, it lost consecutively in March and February. It also rose over 5 per cent in January.
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