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TCS Q1 Earnings Today; Here Are the Things to Watch Out For

IT major Tata Consultancy Services (TCS) will announce its financial results for the quarter ended June 30, 2017 on Thursday post market hours.

Usually, the first quarter of a financial year 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 and appreciating rupee are also seen denting the IT firm’s Q1 numbers.

Shares of the company were trading 0.55 per cent up at Rs 2452.50. Brokerage house IDBI Capital Markets has ‘Hold’ rating on TCS with a target price of Rs 2,440.

KR Choksey Research believe that Q1FY18 will be a relatively status-quo quarter for IT services companies with absence of any surprises. “We believe that depreciation of USD against GBP and EUR (3.2% respectively) will result in a cross-currency tailwind in the range of 90-140 bps in Q1 FY18,” the brokerage house said.

Here are five things you should watch out for in TCS Q1FY18 earnings:

  • Demand outlook especially for BFS, insurance and retail sector
  • Commentary on steps to mitigate the impact of adverse visa policy in the US
  • Any change in EBIT margin band amid rupee appreciation
  • Large deals
  • Net profit growth
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