Indias largest software services exporter Tata Consultancy Services (TCS) will declare its Q1(April-June) earnings today. Bottomline and operational performance is expected to be weak while dollar revenue growth may be highest in industry during the quarter, say analysts. The first quarter is a seasonally strong quarter for IT companies. According to CNBC-TV18 poll estimates, analysts expect profit after tax of the IT company to fall 11 percent sequentially to Rs 4,713 crore, and EBIT may fall 10 percent to Rs 5,654 crore in Q1. EBIT margin is expected to drop 345 bps at 25.7% in June quarter compared to 29.15 % in previous quarter due to currency appreciation, wage hike and change in depreciation policy. The range is 300-400 bps fall. With the change in depreciation policy, there will be an additional one-time charge of about 2% on its fixed assets (as per IFRS) which is around 90 bps, say experts, adding some of the impact can be offset by productivity benefits. The dollar revenue had been on the lighter side in past two quarters, but the management is confident of a pick up. In the quarter ended June 2014, that is likely to show 4.91 percent growth (Constant currency growth at 4.5 percent and cross currency may aid around 50 bps) at USD 3675 million compared to USD 3503 million in March quarter while rupee revenue may increase 2 percent sequentially to Rs 21,992 crore. Its closest peer Infosys recorded 2% growth in dollar revenue and 40 basis points fall in margin (versus expectations of 290 bps) while volume growth was 2.9% and attrition rate was 19.5%.
Posted on: Thu, 17 Jul 2014 03:38:51 +0000
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