Tata Consultancy Services, India's biggest software services exporter, will report earnings for the fiscal third quarter on Monday. Shares in TCS closed 2.14 per cent higher at Rs 1,334.30 on the BSE against a 1.2 per cent rise in the broader BSE Sensex.
TCS has emerged as the favourite IT stock for a lot of investors because of underperformance of Infosys recently. However, Infosys delivered strong results on Friday, and its shares are up nearly 20 per cent in the last two days. Infosys maintained its fiscal year revenue forecast and upped its consolidated revenue forecast surprising the Street.
Unlike Infosys, TCS does not give out revenue guidance, but it has maintained that its revenues would beat IT industry body Nasscom's projection of 11-14 per cent.
TCS is likely to post a 2.24 per cent sequential rise in quarterly sales at Rs 15,970 crore against Rs 15,620 crore in the September quarter. However, net profit is likely to fall 3.15 per cent sequentially at Rs 3,402 crore against Rs 3,512 crore in the second quarter.
U.S. dollar revenue is seen rising 3.1 per cent sequentially to 2,941 million. Cross currency benefit of 20 basis points, on account of appreciation of Euro/GBP versus U.S. dollar, is likely to add to revenue growth
Volume growth is likely to be weaker at 3.1 per cent qoq than the preceding quarters. TCS had reported a 5.3 per cent qoq rise in second quarter and 5 per cent qoq volume rise in first quarter.
EBIT margins are likely to fall by 25-50 basis points to 26.5 per cent.
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