September quarter earnings: TCS to report Q2 results on October 12, Thursday

Moneycontrol News

Tata Consultancy Services (TCS) is scheduled to report its results for the quarter ended September on October 12, Thursday post market hours.

The Board of Directors will consider and approve and take on record the audited financial results of the Company under Indian Accounting Standards (Ind AS) for the quarter and six months ending September 30, 2017.

The Board may also consider declaration of a second interim dividend to equity shareholders. The IT major in July declared an interim dividend of Rs 7 per equity share of Re 1 each of the Company.

The company reported lower-than-expected profit and operational numbers for the quarter ended June, though revenue met expectations.

Profit during the quarter fell 10 percent sequentially to Rs 5,945 crore while revenue declined 0.2 percent to Rs 29,584 crores compared with previous quarter.

Dollar revenue growth was 3.1 percent QoQ at USD 4,591 million, which was in-line with 2.9 percent growth at USD 4,581 million estimated by CNBC-TV18 poll. Constant currency revenue for the quarter grew by 2 percent QoQ, with volume growth of 3.5 percent.

Earnings before interest and tax (EBIT) declined 9.34 percent quarter-on-quarter to Rs 6,914 crore and margin contracted sharply by 230 basis points to 23.4 percent in the quarter ended June 2017, hit by rupee appreciation (3.5 percent during the quarter) and wage hikes.

The software services exporter said all industry verticals except retail and BFSI (banking, financial services, and insurance) exhibited strong growth at over 3.5 percent sequentially.

The contribution of BFSI vertical (grew by 2.3 percent in constant currency) to total revenue reduced to 33 percent from 40 percent in previous quarter. Communication & media segment grew by 3.9 percent and energy & utilities 7.6 percent.

For the quarter ended September, the IT major is expected to report constant currency (CC) revenue growth of 0.7 percent on a QoQ basis and aided 90bps by cross currency (1.6% growth in USD terms), Edelweiss said in a report.

“EBITDA margins expected to expand by 140bps QoQ on account of the absence of wage hikes and visa costs. Commentary on client budgets, spends by BFSI and Retail clients are key monitorables,” it said.