TCS Result Expectations
TCS Q3 net seen down 1.5%, currency headwind may impact revenue
Software services provider Tata Consultancy Services' (TCS) third quarter earnings are expected to be week on account of seasonality (due to year-end furloughs) and cross currency headwinds. Profit is seen falling 1.5 percent sequentially to Rs 6,489 crore and revenue may grow 1 percent to Rs 29,577 crore in Q3.
After September quarter earnings, the management had guided for Q3 and Q4 to be better than usual due to Rs 180 crore India deal (which pushed forward from Q2 to Q3) and likely recovery in retail segment (that recorded 3.1 percent degrowth in constant currency revenue in Q2FY17).
Earnings before interest and tax during the quarter is seen rising moderately to Rs 7,694 crore from Rs 7,617 crore but margin may remain flat at 26 percent (the low end of guidance of 26-28 percent for FY17) on sequential basis. In Q2FY17, margin had a one-time law suit settlement of USD 26 million which depressed margin by 50-60 basis points. Absence of this one-time cost may aid margin in Q3.
TCS stock (down 2 percent) in last 3 month.
Technical Levels for TCS
Support at 2275—2260 and resistance at 2350
Break and sustain above 2375—2390 and then to 2450+ mark in days to come else could test its support level of 2275—2260.
Fresh selling can be initiated below 2260
