The American Depository Receipts (ADRs) of and rose on the New York Stock Exchange Monday, buoyed by the encouraging numbers of peer Limited () for the quarter ended December.
ADRs of Infosys traded 1.3% higher at $18.05, and those of Wipro were up 2.2% at $4.8.
Staving off the weak seasonality factor, TCS reported a strong 5.3% sequential rise and a 19% YoY growth in consolidated revenue to Rs 58,229 crore for the third quarter of the current financial year. This was higher than the expected Rs 56,893 crore.
The software major reported strong 15% growth in revenue in North America and UK, the markets that together make for two-third of the total revenue for TCS, and three-fourth of the profits.
“We are pleased with our strong growth in a seasonally weak quarter, driven by cloud services, market share gains through vendor consolidation, and continued momentum in North America and UK,” said Rajesh Gopinathan, chief executive officer and managing director.
The operating margin, calculated as earnings before interest and tax (EBIT), expanded 50 basis points sequentially to 24.5%.
The overall commentary of TCS did not ring any alarm bells, though the company said it will take a couple of months to get a clear picture on the client budgets.
Addressing questions on the challenges that a potential slowdown in North America and Europe could bring, TCS said caution prevails in these markets, but there has not been a major slowdown in decision making.
At the current juncture, owing to multiple global headwinds, the outlook for FY24 looks uncertain, but recovery could be gradual in the coming quarters, said Sanjeev Hota, head of research at Sharekhan by
Notwithstanding the near-term volatility, the brokerage remains constructive on TCS for the long term.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)