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TCS needs big deals: Analysts

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BS Reporter
Last Updated : Mar 04 2014 | 1:23 AM IST
India's largest software services provider Tata Consultancy Services has been on the run for a few quarters now. However, analysts believe that surge in margins is a scale game and to maintain this growth, the company needs to win large deals.

"Large deals by their nature require vendors to make large upfront investments. This would translate into margin declines in quarters where the vendor makes these investments. Hence, we believe consensus expectations of margins remaining in a narrow band from current levels are at risk. We model in a 70-basis point (-bp) margin decline in FY15 and 90-bp in FY16," said Nitin Padmanabhan and Soumitra Chatterjee of Espirito Santo.

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First Published: Mar 04 2014 | 12:36 AM IST

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