TCS Q1 results: Five reasons why it is not an all-clear signal for TCS investors bl-premium-article-image

TCS reported a largely inline quarter with revenue and EPS marginally above consensus (about 0.8 per cent), while EBITDA was 1.5 per cent above. Most verticals and geographies saw sequential growth too. Given this, one could ask the question ‘Have the business fundamentals in the IT sector bottomed out?’ If so, given TCS’ track record of best-in-class execution and history of successfully adapting to multiple tech and non-tech disruptions in the industry, investors can expect TCS to be on a growth path. However, given many factors that contribute to uncertainty at different levels, it would be too early to celebrate if you are a TCS investor. Here are five reasons why Q1 results is not an all-clear signal and investors need to stay cautious.