INSUBCONTINENT EXCLUSIVE:
Tata Consultancy Services (TCS) is scheduled to report its April-June earnings post-market hours todayIT major Tata Consultancy Services
(TCS) is scheduled to release its earnings for the June quarter after market hours today
Leading brokerages expect TCS, the country's largest IT services exporter, to report strong numbers and, in fact, lead the IT pack in
From the company's outlook on margins to commentary on deal wins as well as pipeline to growth in the Europe and Asia Pacific regions,
analysts will keenly watch several key details reported by the IT major.HDFC SecuritiesHDFC Securities expects TCS to post "strong growth",
respectively.The rupee revenue is estimated at Rs 33,925 crore, a growth of 5.8 per cent and 14.7 per cent QoQ and YoY respectively,
according to HDFC Securities
The EBIT margin is estimated to decline 40 bps QoQ to 25 per cent (a target band of 26-28 per cent) impacted by wage increase (-200bps
margin impact) offset by rupee depreciation and efficiency gains.IDBI CapitalIDBI Capital forecasts TCS to report the highest growth among
IT companies at 3.2 per cent QoQ driven by a ramp-up in large deals secured in fiscal year 2018.The brokerage forecasts the IT major's
EBIT margin (the ratio of earnings before interest and taxes to net revenue) to decline by 115 basis points QoQ impacted by salary increase,
partly offset by rupee depreciation.Investors should watch out for demand outlook for calendar year 2018 budgets, especially for BFS,
ramp-up of large-deals, outlook on EBIT margin amid rupee depreciation, large deal wins and growth in large clients, and growth in digital
services and commentary on ramp-up of recent deals, IDBI Capital added.IDBI Capital has an 'accumulate' call on TCS
shares.EdelweissEdelweiss expects TCS to lead the growth in IT pack with a quarter-on-quarter dollar revenue growth of 3.1 per cent
growth of 3.1 per cent in USD terms and 4.1 per cent in cc (constant currency) terms QoQ (quarter-on-quarter)
Revenue growth will be led by ramp-ups in large deals won during the previous two quarters and seasonal strengths," Edelweiss said.Investors
need to watch out for the company commentary on demand outlook and client budgets in BFSI (banking, financial services and insurance),
rupee appreciation, robust revenue momentum and better execution is likely to restrict margin decline to 50 bps as first quarter will face
the impact of higher visa costs (40 bps or basis points) and wage hikes (180 bps), it added.Edelweiss maintains a 'HOLD' call on TCS shares
citing expensive valuations.
