Will Tata Consultancy Services (TCS) repeat the Infosys story on the stock markets? The country?s largest software exporter in terms of revenue will declare its results after the stock markets close on Monday. The company?s scrip closed at Rs 1,136 on the Bombay Stock Exchange on Friday, falling 2.10%.
A poll of six brokerage firms conducted by FE shows the company is likely to see profits going southwards on a sequential basis, with an approximate decline of 6.8% in the April-June quarter. Revenue is expected to show a marginal growth of 2.1%. TCS?s profits in the January-March quarter grew 6%.
Just like other IT companies have suffered, the rupee appreciation and wage inflation will cast a shadow on the financials of TCS, too.
For TCS, Kotak and Sharekhan predict a decline of 260 and 350-400 basis points, respectively, in the operating profit margins during the quarter.
But TCS will be spared the incremental cost of visa charges (up to $3,500 an application) because of its least dependence on them, unlike its counterparts.
The impact on net income will be absorbed to some extent by gains on forex hedges. Kotak expects TCS to report a forex gain of Rs 80 crore, against Rs 57.8 crore in the March quarter, given its large hedges of $1.4 billion in March-end.
The brokerage firm expects TCS to record a revenue growth of 7.2% in dollar terms driven by volume growth of 8.3%, whereas Credit Suisse expects it to deliver 8% growth in the quarter.