TCS FY24 Annual Earnings Summary
4 quarters covered · ₹2,43,812 Cr revenue · ₹34,151 Cr PAT · 18.4% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY24Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY24The current-quarter record did not contain enough evidence of delivery; the item remains delayed for follow-up.
Q4 FY24Risks flagged during the year
Revenue growth in key markets remains subdued due to client reprioritization and uncertainty; no clear timeline for recovery.
Q2 FY24 · highClients are optimizing existing projects and deferring discretionary spending, causing revenue growth to lag behind strong deal wins.
Q3 FY24 · highNorth America revenue declined 3% YoY and BFSI degrew 3% YoY. Management could not provide a timeline for recovery, citing macro uncertainties.
Q4 FY24 · highManagement highlighted that clients continue to pause or defer discretionary projects with unclear ROI, creating headwinds to near-term revenue.
Q1 FY24 · mediumDespite strong TCV, revenue growth is flat as projects are delayed or paused; deal conversion in Europe is taking longer than usual.
Q1 FY24 · mediumWhile management claims pricing is stable, analysts questioned whether clients are pushing for discounts; management acknowledged no major panic but did not rule out future pressure.
Q2 FY24 · mediumCFO acknowledged that large deals like JLR and BSNL may have lower margins in early phases, though portfolio-level margins are managed.
Q2 FY24 · mediumTCS has 250+ employees in Israel; while business continuity plans are in place, escalation could disrupt operations.
Q2 FY24 · mediumNet headcount fell by over 6,000 QoQ; management attributes it to past hiring, but it could indicate lower demand.
Q3 FY24 · mediumAnalyst noted that despite strong deal wins, revenue growth has been muted, partly due to reprioritization of older programs. Management confirmed this trend.
Q3 FY24 · mediumGenAI is still in early stages with only four production deployments. Management could not provide a timeline for meaningful revenue contribution.
Q4 FY24 · mediumAnnual wage increments effective April 1 will pressure margins in Q1 FY25, though management expects recovery through the year.
What changed through the year
Q1 FY24 · Aspirational margin band of 26%-28%
Management reiterated the long-term margin aspiration but declined to provide a timeline for achievement, citing macro uncertainty.
Q1 FY24 · Fresher hiring target of 40,000 for FY24
The company plans to hire 40,000 freshers in FY24, though the quarterly spread remains uncertain due to demand softness.
Q1 FY24 · GenAI revenue materialization in 2-3 quarters
Management expects GenAI engagements to start contributing meaningfully to revenue in a couple of quarters.
Q2 FY24 · Margin guidance maintained at 26%-28%
Management reiterated the long-term operating margin range of 26%-28%, with no specific timeline for achievement.
Q2 FY24 · Deal win run-rate raised to $9-10B per quarter
COO NGS indicated the new normal for quarterly deal wins is around $9-10 billion, up from the earlier $7-9 billion range.
Q2 FY24 · BSNL 4G/5G rollout target in 12-18 months
Management expects to complete the BSNL network rollout within 12 to 18 months from Q2 FY24.
Q2 FY24 · Fresher hiring to continue; all offers honored
TCS will continue campus hiring and honor all offers, though onboarding may be delayed by a quarter.
Q3 FY24 · BFSI growth expected from Q4
Management expects BFSI to bottom out and grow from the coming quarter, driven by deal wins and seasonal bounce-back.
Q3 FY24 · India growth momentum to continue over 4-6 quarters
BSNL deal will contribute over the next 4-6 quarters, with momentum picking up quarter on quarter.
Q3 FY24 · Margin improvement momentum to continue
CFO stated that levers like productivity, utilization, and subcontractor costs offer further scope for improvement, though no specific target given.
Q3 FY24 · Fresher hiring of 40,000 for FY24 still on track
CHRO reaffirmed the plan to onboard 40,000 freshers in FY24, with hiring progressing as per schedule.
Q4 FY24 · FY25 growth expected to be better than FY24
Management stated that based on strong TCV, FY25 should be better than FY24, but did not provide specific numbers.
Q4 FY24 · Operating margin trajectory similar to FY24
CFO indicated Q1 will see headwinds from wage hikes, with margins clawing back through the year, similar to FY24 pattern.
Q4 FY24 · Pricing improvements to drive incremental margins
CFO noted that incremental margins will need to come from pricing improvements, including renewals and new deals at higher prices.