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Result Day for TCS On Thursday; Here’s What Experts Have to Say

Country’s largest IT firm TCS is expected to report 2.5 per cent to 3.5 per cent sequential growth in dollar revenue for the June quarter, with up to 200 basis points contraction in margins on Thursday.

Usually, June quarter is expected to be a weak one for the IT industry given the wage revisions that may contribute to 70-120 basis points sequential contraction in margins for TCS. However, a rise in visa costs (up to 50 bps hit) and appreciating rupee are also seen denting the IT firm’s Q1 numbers.

A cross-currency tailwind of 70-80 basis points, because of dollar weakness against major currencies, though is seen lifting numbers a bit. Traction in BFSI vertical would be keenly watched, analysts said.

Brokerage Prabhudas Lilladher (PL) expects TCS to report 3.5 per cent QoQ revenue growth in dollar terms and 2.9 per cent growth in constant currency terms. Edelweiss Securities estimates the IT player to post revenue growth of 2.3 per cent in dollar terms and 1.5 per cent in constant currency terms on some traction in BFSI vertical. Kotak Securities pegs constant currency growth for the IT major at 2.4 per cent.

PL expected a cross‐currency would be a tailwind of 70 basis points for the quarter, yet it sees EBIT margin at 23.7 per cent, down 200 bps QoQ.

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