Tata Consultancy Services (TCS), India's largest IT services firm, stood out among the few companies that saw gains on Dalal Street amid a broader market downturn on Monday.
While most stocks were trading in negative territory due to concerns over escalating tensions between Iran and Israel, potentially leading to a wider conflict in the Middle East, TCS shares managed to rise by 0.54% to Rs 4,021.80 on the Bombay Stock Exchange (BSE).
The positive movement in TCS shares was supported by its strong performance in the final quarter of FY24. The company reported a net profit increase of over 9% year-on-year, with a modest 3.5% rise in revenue. This growth exceeded the expectations of many analysts, who had anticipated single-digit growth for the quarter.
Following the Q4 results, TCS's chief financial officer, Samir Seksaria, expressed the company's intention to further enhance its operating margin, which had reached a 12-quarter high. He outlined strategies to achieve this goal, including improving the revenue profile across products and negotiating inflation-linked adjustments during deal renewals.
The company's operating margin saw a significant increase of 150 basis points compared to the previous year, reaching 26%. This improvement was attributed to disciplined execution and reduced subcontractor costs.
Looking ahead, TCS remains optimistic about the financial year 2024-25, citing a strong deal pipeline that includes orders worth $13.2 billion secured in Q4. This positive outlook underscores TCS's confidence in its ability to sustain growth and capitalize on emerging opportunities in the IT services sector.
