IT bellwether Tata Consultancy Services (TCS) is set to kickstart earnings season officially with the announcement due on April 10 (Thursday). Zee Business research expects bluechip IT major to largely post flattish results for the March quarter.
In the March quarter, the company’s consolidated net profit or profit after tax is expected to rise only 1.1 per cent sequentially from Rs 12,380 crore in the December quarter to Rs 12,517 crore. Revenue also at the IT behemoth is seen to rise 1 per cent to Rs 64,591 crore during the review quarter. The same was Rs 63,973 crore in the previous quarter.
Nevertheless, revenue in dollar terms is expected to slide by 0.6 per cent to Rs 749 crore, versus Rs 754 crore in the December quarter of the FY2024-25.
Meanwhile, the research team estimates 0.3 per cent and 0.6 per cent decline in revenue in constant currency (CC) and dollar terms, respectively. The company’s revenue is seeing an impact amid a ramp-down in BSNL project as well as global uncertainty.
TCS’ operational performance
For the review quarter, the company’s EBIT or earnings before interest and taxes (EBIT) is estimated to rise 1.8 per cent during the quarter to Rs 15,946 crore. In the previous quarter of FY25, the earnings before interest and taxes was reported at Rs 15,657 crore.
Furthermore, the EBIT margin is expected to rise only 20 basis points to 24.7 per cent from 24.5 per cent.
Margins are impacted primarily due to the impact of a lower contribution from the BSNL deal.
Key monitorables
Amid the escalating trade war situation, investors and other stakeholders will be on the look out for an impact on the tariff turbulence on the company’s US business. Also, the other focus areas will be the performance in the BFSI segment, deal win and demand outlook.
TCS share price performance
On a year-to-date basis, while Nifty IT has cracked 25 per cent, TCS has outperformed with a drag of just over 20 per cent.
