As TCS readies with Q1 results, here's what top brokerages say

This brokerage expects adjusted profit to rise 10.7 per cent YoY to Rs 9,968 crore on a 16.3 per cent YoY rise in sales at Rs 52,791 crore. Ebit margin is seen at 24 per cent against 25 per cent in March and 25.5 per cent in the year-ago quarter. All eyes will be on whether there is any change in nature of demand, presence of large and mega in a deal pipeline, hiring, attrition and onsite wage inflation trends and its impact on margins ahead, PL said.

Emkay Global sees PAT for TCS rising 10.5 per cent YoY to Rs 9,958 crore on a 16.5 per cent rise in sales at Rs 52,915 crore. It is expecting a 2.1 per cent sequential growth in dollar revenues, factoring in 190 basis points cross-currency headwinds. EBIT margin is likely to fall 150 basis points due to wage hikes and an uptick in travel and visa costs, it said.

In rupee terms, Motilal Oswal Securities sees TCS reporting an 11.2 per cent YoY (0.9 per cent QoQ) rise in adjusted net profit at Rs 10,050 crore on a 15.2 per cent YoY (3.4 per cent QoQ) rise in net sales at Rs 52,320 crore. Ebit is seen growing 7.9 per cent YoY (down 1 per cent QoQ) to Rs 12,510 crore. Ebit margin is seen falling to 23.9 per cent from 5 per cent in the March quarter and 25.5 per cent in the June quarter last year, hurt by wage hike and continued supply-side pressures.

This brokerage expects profit to rise 7.4 per cent YoY (2.2 per cent QoQ) to Rs 9,703 crore. Edelweiss expects TCS to report revenue growth of 1.4 per cent QoQ in dollar terms and 3.4 per cent QoQ in constant currency terms. This brokerage feels investors may watch out for deal momentum, tenure and pricing; attrition and supply-side pressure; client budget and how the pipeline is shaping amid geopolitical uncertainties and weak macro outlook.

This brokerage expects a growth of 3.6 per cent sequentially in CC terms, led by seasonal strength, gains in vendor consolidation decisions and momentum in digital transformation programs. It expects reasonable TCV growth of 11-23 per cent YoY to $9-10 billion. The brokerage expects investors to focus on the impact of macro events on demand and the nature of programs that will stay, and programs that will be shelved in case of recession. Further, it expects investors to focus on any deferral or cancellation of programs, especially in directly impacted verticals by the recent chain of events.

This brokerage expects constant currency (CC) revenue growth of 3.7 per cent QoQ and sequential dollar revenue growth of 2.3 per cent on strong momentum in digital transformation programmes. It expects growth to be broad based across verticals. But margins are expected to decline 140 bps QoQ due to wage hikes, travel costs, supply side pressures, to be offset by rupee depreciation.


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