TCS Q1 results: Five key things to watch out for on July 10

Here are five things to watch out for from TCS in Q1.

Revenue growth

Market participants will closely watch out for revenue figures by the Tata Group company at a time of heightened uncertainty across the world surrounding geopolitical tensions and trade wars. HSBC expects TCS to report revenue of $7,502 million, representing 0.5% sequential growth.

The company is likely to report a net profit of ₹11,925 crore as against a net profit of ₹12,224 crore in the previous quarter.

Deal wins

Analysts will also closely watch out for major deal wins in the first quarter of the current financial year. The Mumbai-based IT company reported record deal wins in the previous quarter. Its total contract value (TCV) stood at $12.2 billion in deal wins, with a book-to-bill ratio of 1.6. The book-to-bill ratio in the IT industry compares new orders (bookings) to billings (revenue recognised), a value above 1 indicates strong demand. TCS's full-year order book stood at $39.4 billion for FY25, while Q4 deal wins are above market estimates.

Meanwhile, HSBC says that it expects growth to be driven by BFSI and energy, while other verticals may see steady or declining revenues.

EBIT margin

The IT giant reported an EBIT margin of 24.2% in the March quarter, and it is likely to report margin contraction of 30 basis points in Q1 driven by lower utilisation levels and higher investment in the business for talent, growth and infrastructure, HSBC noted.

Key focus areas

Analysts will keenly watch out for guidance on US demand, deal conversion cycles, and pricing amid the new policy uncertainty. Outlook on discretionary spending levels across verticals will also be closely tracked.

TCS share performance in Q1

TCS shares staged a muted performance in the first quarter, as the stock has declined 2.5% as against an 8.5% surge in the benchmark NIFTY50 index.