IT sector giant Tata Consultancy Services (TCS) is going to release its financial results for the first quarter of FY 2023 i.e. June quarter today.
TCS Q1FY23 Earning Preview: IT sector giant Tata Consultancy Services (TCS) is going to release its financial results for the first quarter of FY 2023 i.e. June quarter today. The eyes of the market will be on the quarterly results of TCS, the second largest company after RIL in terms of market cap today. Brokerage houses and experts are of the opinion that the revenue growth of the company can be in the range of 3 per cent to 5 per cent. Whereas growth in profits can be seen in double digits. Experts also say that due to increase in salary, the margin of the company will be affected. However, the demand commentary may remain strong. Management guidance will be very important.
Expected double digit growth in PAT
According to the reports of different brokerage houses, the revenue growth of TCS in constant currency term can be between 3.6 percent to 4 percent on a quarterly basis. However, on an annual basis, it can see growth in double digits. The company’s PAT is also expected to increase in double digits on an annual basis. However, it may remain flat on a quarterly basis. According to brokerage house Emkay Global, on a quarterly basis, 2.1 percent growth in revenue can be seen in US dollar terms. According to brokerage house ICICI Securities, the EBIT margin of the company can be 23.5 percent. On the other hand, according to brokerage house Motilal Oswal, the EBIT margin is expected to be at 23.9 percent.
Company is in strong position
ICICI Securities says that TCS has focused on diversification across all its verticals. This can prove to be a big beneficiary in large cost takeout deals and vendor consolidation deals. According to Motilal Oswal, even though margins are under pressure due to salary hike, the demand commentary of the IT major is expected to remain strong. The company is expected to be a key beneficiary of long term structural tailwinds amid the technology pack.
How were the results in the March quarter
In the last quarter of FY 2022, i.e. March quarter, TCS’s Conso profit grew 7 per cent year-on-year to Rs 9926 crore, while Kanso revenue grew 16 per cent year-on-year to Rs 50,591 crore. TCS’s banking and finance segment revenue grew by 11.2 per cent and stood at Rs 19,532 crore. The company’s revenue crossed 50000 crores for the first time in the March quarter.