The fourth-quarter earnings season for the financial year 2024-25 (FY25) kicks off today, April 10, 2025, with Tata Consultancy Services (TCS) poised to release its earnings report for both the fourth quarter and the entire financial year. Alongside TCS, stock broker Anand Rathi Wealth and pharmaceutical firm Evoq Remedies will also announce their financial results today.
Analysts anticipate that TCS, India's largest IT services firm, will report subdued revenue and profit growth for Q4 FY25. They expect revenue to decline by 1.51 percent quarter-on-quarter to ₹63,009.75 crore, primarily due to seasonal factors and a slowdown in key projects. A significant factor contributing to this dip is the ramp-down of the Bharat Sanchar Nigam Limited (BSNL) project. However, analysts suggest that a resurgence in demand from developed markets may help partially offset the decline.
On Wednesday, April 9, 2025, Indian stock markets experienced a sharp decline as investor sentiment was rattled by escalating US-China trade tensions. The Sensex plummeted by 380 points, while the Nifty 50 shed 137 points. Mid and small-cap stocks suffered even steeper losses, resulting in an estimated ₹3 trillion erosion in investor wealth. This growing uncertainty surrounding global trade disputes has contributed to significant volatility across financial markets worldwide.
In contrast, Wall Street saw a major turnaround, with the Dow Jones Industrial Average surging 7.9 percent to close at 40,608.45. The S&P 500 jumped 9.5 percent to 5,456.90, while the Nasdaq Composite Index experienced an even stronger gain of 12.2 percent, closing at 17,124.97. This rally followed US President Donald Trump's announcement of a 90-day pause on tariffs against select nations, which came after Indian markets had closed for the day.
As Indian financial markets will remain closed today on the occasion of Shri Mahavir Jayanti, trading will resume on April 11, 2025. Investors are keenly awaiting TCS's results, particularly the management commentary, which will provide insights into the current market situation and whether deals are shaping up as expected. Analysts will be closely watching for indications on whether FY26 will be a better year than FY25.
In the previous quarter, TCS's US division saw a decline of 1.5 percent, while the UK business experienced a 4 percent quarter-on-quarter drop. The European Union reported a decline of 6.4 percent. In contrast, India grew by 8.2 percent, although the Asia Pacific region fell by 4.2 percent. TCS's revenue growth in India stood at 8.3 percent sequentially, but the ex-India business saw a revenue decline of 2.7 percent.
Key verticals for TCS, such as Banking, Financial Services, and Insurance (BFSI), declined by 4 percent, while manufacturing and healthcare sectors fell by 4 percent and 4.5 percent, respectively. In Q3, TCS reported that US dollar revenue had declined by 1.7 percent to $7,359 million, while rupee revenue also dipped by 0.5 percent sequentially to ₹63,973 crore. Despite these challenges, TCS reported an EBIT of ₹15,657 crore, up from ₹15,465 crore in Q2, with an EBIT margin that expanded by 40 basis points to 24.5 percent from 24.1 percent last quarter. Net profit had increased by 4 percent quarter-on-quarter to ₹12,380 crore.
Looking ahead, analysts project that TCS's US dollar revenue could be 0.8 percent lower sequentially at $7,481.5 million, while rupee revenue is expected to rise by 1.2 percent sequentially to ₹64,741 crore. EBIT is projected to be ₹16,034 crore, with an EBIT margin anticipated to rise to 24.8 percent from 24.5 percent last quarter.
Despite these projections, shares of TCS have been underperforming in 2025, aligning with the broader IT index. The stock has corrected 10 percent in the last month and is down 21 percent year-to-date. From its 52-week high of ₹4,592, the stock has dropped 30 percent. The IT sector has faced significant pressure on Dalal Street, particularly following the recent sell-off in US markets, which has led to the Nifty IT index, along with TCS and many other peers, hitting 52-week lows.
With the 90-day pause on tariffs announced by President Trump, there is cautious optimism in the market. The resultant rally in the Nasdaq on Wednesday night makes the IT sector a prime short-covering candidate. Investors will be keen to see how TCS's results will influence market sentiment moving forward.
As TCS prepares to announce its results, the anticipation builds. Good Morning! Welcome to CNBC-TV18's live coverage of the results being reported by Tata Consultancy Services Ltd. (TCS), the Tata Group giant. The results will be out later this evening, and there is much to glean from the management's insights.
