Following close on the heels of Infosys revealing a top quarter, IT major Tata Consultancy Services (TCS) is all set to announce its second quarter (Q2) earnings Tuesday evening. While Infosys did very well (https://fexp.in/IBh197190 ), market experts see around 9 per cent quarter-on-quarter (qoq) growth in TCS net profit figures for the quarter ended September 30, 2015.
For the first quarter ended June 30, 2015, TCS posted a consolidated net profit of Rs 5,484.12 crore, up 53.10 per cent, against Rs 3,712.67 crore in the sequential quarter ended March 2015. Gross sales of the company jumped 5.98 per cent quarter on quarter (qoq) to Rs 25,668.11 crore.
For the second quarter, Motilal Oswal sees 70 basis points negative impact on revenue growth on account of depreciation in AUD and currencies in Latin America, where TCS has a decent exposure. Dollar revenue growth is expected to be 3.3 per cent. In rupee terms, revenue estimate of Rs 27,120 crore implies growth of 5.7 per cent qoq on the back of around 2 per cent qoq depreciation in realised INR. Motilal Oswal expects EBITDA margin to expand by 65 basis points QoQ to 28.7 per cent on the back of rupee depreciation. On the back of higher margins and other income, net profit is estimated to grow at 9.5 per cent on qoq basis to Rs 6,250 crore.
On the other hand, Angel Broking says the company may post 3.5 per cent sequential growth in dollar revenues to $4,177 mn. In rupee terms, revenues are expected to come in at Rs 27,244 crore, up 6.1 per cent qoq. EBITDA margin is expected to show an expansion of around 89 basis points qoq to 29.1 per cent on account of strong growth. EBIT is expected to come in at 27.2 per cent V/s 26.3 per cent, a qoq expansion of 89 basis points. Consequently, net profit is expected to rise around 9 per cent on qoq basis. The brokerage house has ‘buy’ rating on TCS stock with a target price of Rs 3,168.
TCS share price was trading 0.70 per cent down at Rs 2,574 in morning trade on Tuesday.