TCS reported a strong quarter with beat on revenues and margins
TCS reported a robust quarter with 4.1% qoq cc growth vs 2.5% consensus expectations. A surprise was the 40bp margin expansion qoq to 26.6% EBIT margin, despite a wage hike in the quarter. Management is confident in the demand environment and affirmed double-digit growth in FY22e. Management does not believe there was any budget flush in Q3, and, hence, thinks the strength seen in Q3 should continue in Q4.
HSBC was already expecting 12% growth in FY22e, but the Q3 beat has prompted HSBC to raise our growth estimate to 14%. HSBC expects a return to 8-9% growth in FY23e/24e: Reuters