IT giant TCS reports better than expected revenue and margin for the first quarter of the current financial year, leading to a 3% increase in share price. Despite a 3.2% decline in net profit, TCS saw sequential growth in all major markets and a seven-quarter high in hiring. Global brokerage Jefferies upgrades the stock and sees further potential gains of 18%. Stay updated on TCS and other business news, stock market updates, and personal finance coverage with Zee Business.
TCS Q1 Results Outperform Expectations: Stock Surges 3%
Background:
Tata Consultancy Services (TCS), India's largest information technology (IT) company, recently released its financial results for the first quarter of the current fiscal year (FY23). The company reported a better-than-expected revenue and margin, leading to a 3% surge in its share price.
Key Takeaways:
Global Performance:
TCS witnessed sequential growth in all major markets, with North America contributing 52.9% to revenue, Europe 27.5%, and India 13.6%. Among key sectors, BFSI (Banking, Financial Services, and Insurance) remained the largest contributor, followed by manufacturing and retail.
Analyst Outlook:
Global brokerage Jefferies has upgraded its rating on TCS to "Buy" and sees further potential gains of 18%. The brokerage cited the company's strong revenue growth, margin improvement, and sustained hiring as positive factors.
Top 5 FAQs and Answers:
Q1. Why did TCS's net profit decline despite higher revenue? A1. The decline was primarily due to rising expenses and unfavorable currency fluctuations.
Q2. What was the reason behind the strong margin improvement? A2. Cost optimization and higher utilization contributed to the margin expansion.
Q3. How has TCS performed in the global market? A3. The company witnessed sequential growth in all major markets, with North America being the largest contributor.
Q4. What is the impact of hiring on TCS's operations? A4. The sustained hiring indicates strong demand for IT services and helps the company expand its workforce.
Q5. What is the outlook for TCS's stock price? A5. Analysts are generally positive on TCS's prospects, with Jefferies upgrading its rating and forecasting further gains.
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