TCS, Infosys Q3 Results: Here’s how both stocks are likely to open today

Tata Consultancy Services (TCS) and Infosys shares will be in focus on Friday as the IT majors kicked off the earnings season and announced their results for the third quarter of FY24 on Thursday, January 11.

For the IT industry, the December quarter is always a seasonally difficult time, but it became worse due to the ongoing downturn in the US and Europe, which account for the majority of software services exporters' revenue.

Also Read: Infosys Q3 results: Revenue guidance to dip in profit — 6 key highlights from IT major's earnings

The nervousness in the market was visible as the Nifty IT Index closed 0.28% lower on Thursday. TCS share price ended at ₹3,736.20 per share, up by 0.61% before the announcement of Q3 results, whereas, Infosys shares ended 1.62% lower at ₹1,495.00 apiece on the BSE. 

TCS posted a 2% year-on-year (YoY) growth in consolidated net profit, reaching ₹11,058 crore, while revenue saw a 4% increase, totaling ₹60,583 crore. Analysts' had projected revenue at ₹60,119 crore and a profit of ₹11,446 crore.

Also Read: TCS Q3 result: Tepid growth in revenue, profit to dividend announcement - here are 5 key highlights

“TCS' Q3 earnings and margins beat street estimates. We were expecting a flattish revenue growth in rupee terms while the company reported earnings that came above expectations. The best thing is despite a seasonally weak quarter with macro-economic headwinds, TCS performed very well on most earnings parameters," said Prashanth Tapse, Senior VP (Research), Mehta Equities.

Infosys reported a 1.7% sequential fall in its consolidated net profit for the fiscal third quarter ended December 2023 (Q3FY24) at ₹6,106 crore. Sequentially, the consolidated revenue was down 0.4% to ₹38,821 crore.

Although TCS exceeded expectations across various metrics, Infosys once again adjusted its guidance, and the number of deal wins was lower compared to the previous quarter. However, according to experts, the overall results were not as dire as initially feared.

Also Read: TCS vs Infosys: 5 most important comparisons you should know

Investors are keen to watch how both the stocks are likely to open after Q3 results. 

"On Friday, the focus will be on TCS & Infosys stocks, which will react to their Q3 earnings announcements. From a technical perspective, Nifty’s aggressive upside targets are still seen at the psychological 22,000 mark, while confirmation of strength is only above the 21,836 mark.” Tapse said.

He added that the TCS shares can cross its resistance above 3,800 and stay above this level with an optimistic view for the short term.

Analysts further predict that the TCS stock price to move in range for some time today. 

“Decent results from TCS, especially on the margin front, However, the fall in order bookings is a concern. Technically, 3,700–3,600 is a strong demand zone. 3,800–3,850 is a supply zone. We can expect a range-bound move for some time; above 3,850, we can expect momentum to pick up,” said Santosh Meena, Head of Research at Swastika Investmart.

Meanwhile, Infosys results were mostly in line, without any major surprises.

“Infosys results are mostly in line, without any major surprises. Technically, 1,480–1,460 will be a demand zone, while 1,540–1,560 is a resistance zone,” Tapse further added.

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.