Result Analysis of Tata Consultancy Services Limited for Q3-FY24

Earnings Snapshot

Methodology: Red= Decreased, Green= Increased, Yellow= Mediocre Increase, N/A= Inc/Dec is over 100%.

Analysis

Revenue from Operations

1. Q-o-Q: Tata Consultancy Service Q3 result experienced a 1.5% increase in revenue from operations, reaching ₹60,583 crores in Q3 FY24. This growth is a positive sign and reflects the company's ability to generate more income in the current quarter compared to the previous one.

2. Y-o-Y: The year-on-year comparison shows a substantial 4.0% growth in revenue from operations compared to Q3 FY23, demonstrating a steady improvement over the past year.

Operating Profit

1. Q-o-Q: TCS reported a 4.2% increase in operating profit, reaching ₹14,925 crores in Q3 FY24. This growth indicates improved efficiency and cost management in the current quarter compared to Q2 FY24.  

2. Y-o-Y: The year-on-year operating profit increased by 5.7%, showcasing TCS's sustained profitability over the last year.

Operating Profit Margin 

1. The operating profit margin increased by 60 basis points (Bps) quarter-on-quarter, standing at 24.6%. This improvement suggests better operational efficiency and cost control in the current quarter.

2. The year-on-year comparison reflects a 40 Bps increase in the operating profit margin, reaching 24.6% in Q3 FY24.

Net Profit

1. Q-o-Q: TCS reported a slight decline of 2.5% in net profit, totaling ₹11,097 crores in Q3 FY24. Despite the decrease, the company remains profitable in the current quarter. 

2. Y-o-Y: On a year-on-year basis, TCS achieved an 8.8% growth in net profit, indicating consistent financial performance over the last year.

Net Profit Margin

The net profit margin witnessed a quarter-on-quarter decline of 3.9%, settling at 18.3% in Q3 FY24. This reduction may be attributed to various factors affecting the company's bottom line.

However, on a year-on-year basis, the net profit margin increased by 80 Bps, standing at 18.7% in Q3 FY24. This suggests overall improvement in profitability compared to the same quarter last year.

Earnings Per Share (EPS)

The basic and diluted EPS both experienced a slight decline of 2.3% quarter-on-quarter, reaching ₹30.29 in Q3 FY24. Despite this dip, the Tata Consultancy Services Shares continues to generate earnings for its shareholders.

On a year-on-year basis, both basic and diluted EPS grew by 2.2%, demonstrating a positive trend in earnings over the past year.

Overall Interpretation

Tata Consultancy Services shares has showcased robust financial performance in Q3 FY24, with notable growth in revenue from operations and operating profit. The quarter-on-quarter and year-on-year comparisons reveal the company's resilience and adaptability in a dynamic business environment. While there was a slight decline in net profit and net profit margin on a quarterly basis, the annual performance remains strong. TCS's ability to maintain profitability and drive revenue growth positions it well in the competitive IT services market.