Tata Consultancy Services (TCS), India’s largest IT services company, is going to announce its financial results on Monday (January 9) for the October-December 2022 quarter (Q3FY23), thus kicking off India Inc’s Q3 earnings season. The company, according to various brokerages, is expected to post revenue growth of 1.4 per cent in dollar terms.
BNP Paribas expects TCS to post a revenue of $6,974 million for the October-December 2022 quarter, up 1.4 per cent quarter-on-quarter, due to the impact of usual seasonality. In rupee terms, it expects the IT major’s revenue to grow 3.1 per cent q-o-q to Rs 57,029.3 crore.
Analysts at Motilal Oswal said, “In CC terms, the revenue growth is likely to be at 1.6 per cent QoQ, implying 20bp of currency headwinds. Third quarter furloughs are expected to be higher than the earlier trend.”
Anand Rathi said TCS is expected to report a revenue of $6,978 million in US dollar terms and a profit after tax (PAT) of Rs 10,943 crore.
On the demand outlook in Q3, TCS CEO Rajesh Gopinathan had said during Q2 earnings, “While the strength of our order book as well as the pipeline for Q3 is somewhat comforting, given the volatility, we remain very vigilant and are staying very close to our clients.”
Axis Securities expects revenue in rupee terms to come in at Rs 57,280 crore, a growth of 3.6 per cent over Rs 55,309 crore in the quarter ended September 30.
Analysts at Kotak Institutional Securities said, “The focus on furloughs will be high. The furlough impact was minimal in the last two years due to aggressive client spending and large deal ramp-up. We expect high furloughs in hi-tech and moderate in others.”
According to HDFC Securities, TCS is likely to report Q3 revenue of $6,958 million, an increase of 1.2 per cent quarter-on-quarter. In rupee terms, the revenue is expected to be at Rs 57,058 crore.
It said that growth is likely to be moderate, aided by ramp-up on large deal wins in the previous quarters, but margins could remain flat due to moderation in supply-side constraints.
HDFC Securities also said Q3 EBITDA (earnings before interest, tax, depreciation and amortisation) margin at 26.6 per cent as compared with 26.2 per cent in the second quarter of FY23.
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