TCS share price: Is this a stock to buy today after Q2 results 2024?

TCS share price: After the announcement of Q2 results 2024, Tata Consultancy Services (TCS) shares are expected to remain under the radar of Indian stock market investors. On Thursday, the Indian IT major reported a tepid 5% YoY rise in its net profit for the July-September (Q2) quarter as cautious trends seen in the last few quarters continued. The company saw a decent rise of about 8 per cent in its revenue, while its operating margin contracted slightly on a YoY basis.

According to stock market experts, the company reported a rise in employee headcounts despite missing the market estimates during the July to September 2024 quarter. They said that the US Fed's easing of monetary policy will benefit Indian IT majors, including TCS, giving a 'buy' tag to the TCS shares, predicting a short-term target of ₹4,500 apiece.

TCS Q2 results 2024 review

Reviewing the TCS Q2 results 2024, Sanjeev Hota, Head of Research, Sharekhan by BNP Paribas, said, "TCS reported weak set of numbers with a miss on both revenues and margins, though revenues miss was a tad below our estimates, margins performance surprised us negatively. Further, TCV wins at USD 8.6 bn below our expectations, and the 8-quarter average is ~USD 9.6bn. On the positive side, the employee headcount increased by 0.9% QoQ for the second quarter in a row, and the BFSI vertical was up 1.9% QoQ in USD terms, which was higher than the company average growth. With the FED easing cycle and stable macro prints, the growth recovery narrative still holds for the IT sector and TCS, steeping into the second half of fiscal FY25 and FY26. We have a BUY rating on TCS."

"TCS reported net profit declining by 1.1% QoQ to ₹11,909 crore, misses estimates. However, the company's rupee revenue saw a 2.6% QoQ increase, rising to ₹64,259 crore from ₹62,613 crore. The EBIT margin saw a dip, reported at 24.1% in Q2, down from 24.7% in the previous quarter. TCS declared a second interim dividend of ₹10 per share with a set record date of October 18, 2024. The order book total contract value (TCV) was marginally up at $8.6 billion in Q2 FY25 from $8.3 billion in Q1FY25. Further, the company announced that it had cancelled its post-earnings press conference and interviews following the demise of Ratan Tata on Wednesday," Master Capital Services said.

TCS share price target

On the outlook of TCS shares, Sumeet Bagadia, Executive Director at Choice Broking, said, “TCS shareholders can hold the stock, maintaining a stop loss at ₹4100. If the base remains sacrosanct, one can add more for the near-term target of ₹4400 to ₹4500. Fresh investors can also buy TCS shares, maintaining a buy-on-dips strategy for the near-term Target of ₹4400 to ₹4500. However, fresh investors must maintain a stop loss at ₹4100.”

TCS Q2 results 2024

On Thursday, TCS reported a tepid 5 per cent year-on-year (YoY) rise in its net profit for the July-September (Q2) quarter as cautious trends seen in the last few quarters continued. The company saw a decent rise of about 8 per cent in revenue. At the same time, its operating margin contracted slightly on a YoY basis, according to the company's exchange filing, cyber security, AI. Cloud and TCS Interactive led the growth in the September quarter.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.