As it turns out, there is an unusually large difference between analysts’ estimates of Tata Consultancy Services (TCS) Ltd’s Q2 earnings and the actual reported earnings. While there is little doubt that analysts missed earnings by a mile, it also appears that the company missed some of its own internal estimates by a great extent. It instead reported earnings before interest and tax of ₹9,361 crore, which is almost 6% lower than the consensus estimate. The worry for investors is that apart from the drop in revenue growth rates, profit margins fell to a nine-quarter low. Typically margins bounce back in Q2 when compared to Q1, which is when wage hikes and higher visa costs typically depress margins.

Source: Mint October 10, 2019 14:15 UTC