Q2 results 2023: After announcement of TCS results for Q2FY24, market observers and investors are eagerly awaiting for the announcement of Infosys results and HCL Technologies results today. As TCS results for Q2 2023 were in line with the market expectations, Dalal Street is abuzz about other two IT majors meeting the market expectations. They said that job creation below attretition should be seen from AI perspective instead of job losses. Experts went on to add that after the outbreak of Russia-Ukraine war, IT market is buzz with IT major moving from ‘missing market expectations’ to ‘meeting the market expectations’.
What TCS results signal?
Speaking on TCS Q2 results 2023, Saurabh Jain, Vice President — Research at SMC Global Securities said, “TCS was able to meet the expectations but their guidance was weak. Its job creation has remained lower than the rate of attretion, which means the company came into profit at the cost of job loss, which will hit the order book of the company.” However, Jain maintained that Infosys and HCL Tech results are expected to replicate the kind of results TCS has delivered in July to September 2023 quarter.
Decoding the TCS Q2 results 2023, Sandeep Pandey, Director Basav Capital said, “Indian IT companies are sitting on cash reserves and they are moving towards Air Intelligence (AI) regime. After the outbreak of Russia-Ukraine war, IT companies had been missing the market expectations on a regular basis. For the first time after Ukraine invasion, TCS has been able to meet the market expectations despite weak guidance. However, one should note that Q3 and Q4 generally remains weak for Indian IT companies and hence TCS has managed to perform well in the second quarter of the current financial year.”
TCS Stock Check: Up 15% in the last 1 year, is it a good time to buy?
What market expects from Infosys, HCL Technologies
On what kind of results one can expect from Infosys and HCL Tech, Sandeep Pandey said, “Like TCS, both Infosys and HCL Tech have manged to attract business in the second quarter of current fiscal. Hence, they are expected to deliver TCS like results as their business model replicate TCS’ business model. Hence, I am expecting Infosys and TCS to meet the market expectations.”
TCS buyback does little to lift investor mood as outlook muted
On how long it will take for the Indian IT companies to hit the levels of beating the market expectations after this trend reversal, Sandeep Pandey said, “As I said earlier, Indian IT companies are looking set to move from missing the market expectation status to meeting the market expectations status. Now, next two quarters may not be good enough for the Indian IT companies but they are expected to continue meeting the market expectations. In that case, I am expecting trend reversal in IT segment from next financial year and the coming quarters would be an opportunity for medium to long term investors to continue bottom phishing on every dip in IT majors like TCS, Infosys, HCL Tech and Wipro.”
TCS reported a rise of 8.7 per cent in its consolidated net profit at ₹11,342 crore in the September quarter, compared to ₹10,431 crore in the corresponding period last year. The board approved a buyback of ₹17,000 crore at a price of ₹4,150 per equity share at a premium of about 15 per cent. This is the company’s fifth share buyback for the IT behemoth in a span of six years.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 12 Oct 2023, 12:03 PM IST