FX gains cushion TCS margins

Brokerages indicated that TCS’s margin performance in Q4 remained protective rather than showing any sharp expansion. EBIT margin rose about 10 basis points sequentially to around 25.3%, supported by better realisations and currency movement. However, these gains were largely offset by higher spending.

“Tailwinds from realisation improvement (+40 basis points) and forex (+110bp) were partly offset by higher external consultant costs (-40bp), investments in talent & platform integration (-40bp), GTM & ecosystem partnerships (-50bp) and integration-related investments (-10bp). TCS reinvested some tailwinds back into bolstering capabilities and growth engines,” analysts