Tata Consultancy Services (TCS) is poised for a significant day as it prepares to announce its earnings for the second quarter of FY25 on October 10. This major event will not only unveil the company’s financial performance but is also expected to include the declaration of an interim dividend, a move that’s sure to attract the attention of investors.
Investors and analysts are eagerly awaiting TCS’s Q2 results, which will be released after market hours today. As India’s largest IT services firm, TCS holds a key position in the market, and its earnings report is anticipated to provide insights into the tech sector’s overall health.
According to a regulatory filing made by TCS on September 30, a meeting of the Board of Directors has been arranged for Thursday, October 10, 2024. During this meeting, the board will not only approve the financial results but will also discuss the consolidated financial performance of TCS and its subsidiaries for the quarter ending September 30, 2024.
The approval of condensed financial results is a crucial milestone, as it reflects the company’s operational achievements and financial health over the recent period. Stakeholders are particularly interested to see how effectively TCS has navigated challenges and opportunities in the IT landscape.
In addition to the earnings announcement, TCS will consider the declaration of a second interim dividend for its equity shareholders. The record date for this dividend has been set for October 18, which means shareholders need to be mindful of this date to benefit from the upcoming distribution.
“If declared, the second interim dividend will be paid to equity shareholders whose names are listed on the Register of Members or in the records of Depositories at the close of business on Friday, October 18, 2024,” stated TCS in their announcement. This emphasizes the company’s commitment to rewarding its investors.
TCS Dividend History
The dividend to be declared today will mark the second dividend issuance for the financial year 2024-2025. Previously, TCS distributed an interim dividend of ₹10 per share, with the record date being July 19. This consistent dividend distribution highlights the company’s strong cash flow and commitment to returning value to its shareholders.
In FY24, TCS showcased its financial robustness by distributing a total dividend payout of ₹46,223 crore to shareholders. Notably, a final dividend of ₹28 per share was announced in April 2024, supplemented by an interim dividend of ₹9 per share and a special dividend of ₹18 per share earlier in the year.
Throughout FY24, TCS also declared multiple interim dividends, including ₹9 per share in both the first and second quarters. In addition, the IT giant successfully executed a share buyback program worth ₹17,000 crore, demonstrating its confidence in long-term growth and shareholder value enhancement.
For the previous fiscal year, FY23, TCS declared a total dividend of ₹115 per share, which amounted to ₹33,306 crore. This consistent payout trend is indicative of TCS’s strong financial standing and its ongoing commitment to its investors.
TCS Q2 Results Preview
As investors prepare for today’s earnings announcement, TCS is projected to report robust earnings growth driven by the ramp-up of major deals, particularly the one with BSNL. The anticipated strength in the results reflects broader trends in the IT sector.
Analysts estimate TCS’s Q2 revenue could increase by 2.2%, reaching ₹64,011 crore compared to ₹62,613 crore in the previous quarter. Revenue in USD terms is expected to rise approximately 2%, positioning TCS optimally within the competitive landscape.
In terms of net profit for Q2FY25, projections indicate a rise of 3.5%, anticipated to reach ₹12,461 crore, compared to ₹12,040 crore in the previous quarter. This growth reflects TCS’s effective management strategies and its adaptability in a fluctuating market.
Operationally, TCS’s Q2 earnings before interest and taxes (EBIT) are projected to rise by 3.1% to ₹15,916 crore from ₹15,442 crore, QoQ. Forecasts on EBIT margins vary, with some analysts predicting a slight decline while others expect a modest expansion, indicating differing views on wage hikes and cost management.
Looking ahead, market analysts are keenly focused on TCS’s outlook in Europe, particularly given the market’s challenging conditions despite a series of significant deal wins. Commentary on the demand environment for FY25, especially concerning discretionary spending, deal visibility, sector performance, and margin expectations will be critical for shaping investor sentiment.
TCS Share Price
As of Wednesday, TCS shares closed slightly higher at ₹4,252.30 each on the BSE, reflecting a stable yet cautious trading environment. The stock price has experienced some fluctuations, facing a decline of 4.5% over the past month, while showing a more positive trend with a gain of over 6.7% over the last six months.
Year-to-date, TCS shares have seen a rise of more than 12%, with nearly 17% growth over the previous year, showcasing resilience amid market variations. This underscores TCS’s strong performance and its continued appeal to investors.
Disclaimer: The perspectives shared in this article represent the views of individual analysts or brokerage firms and do not necessarily reflect those of Mint. Investors are encouraged to conduct thorough research and consult with certified professionals before making any investment decisions.
