Tata Consultancy Services to announce Q1 earnings today: Key points to watch out

Tata Consultancy Services is likely to report a 6.2 percent fall in net profit sequentially to Rs 6,195 crore. Its revenue may decline 0.2 percent to Rs 29,580 crore compared with the previous quarter, according to a poll by CNBC-TV18.

The Mumbai-based firm is likely to witness a dollar-revenue sequential growth of 2.3 per cent.

Annual wage hike and visa costs, besides a 3.9 per cent appreciation in the rupee are seen hurting revenues.

In April this year, US President Donald Trump signed an executive order that called for a review of the H-1B visa programme, saying they should never be used to replace American workers and be must given to the most skilled and highest paid applicants.

Experts said Trump's order to review visa processes was aimed at firms such as TCS, Infosys and Wipro, which from 2005-14 snagged around 86,000 H-1B visas, roughly equivalent to the number of H-1B visas the United States issues in total each year.

FY18 outlook from Management

The firm has maintained its margin guidance band of 26-28 percent despite FY17 being lower at 25.7 percent. The IT firm expects FY'18 as an incrementally positive year for the company and expects business in the banking, financial services and insurance (BFSI) to recover.

The BFSI domain is impacted by cyclical factors.

Investors, traders would watch out for the following cues from the earnings announcement today.

• The management will comment on the demand environment of its services and products. The comment would indicate the business the firm is likely to record in FY 18.
• Any commentary on recovery in banking, financial services would be keenly watched.
• The hiring outlook of the company for FY'18. This would indicate how keen the firm is to take on new projects.
• Any announcement on interim dividend would be watched.
• Any comments on the margin range for FY 18 would be tracked.