TCS Q1 net profit seen down 2.2% to Rs 1285.6 cr

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TCS (Tata Consultancy Services) is set to announce its Q1FY10 numbers. According to CNBC-TV18 estimates, its net profit is seen going down 2.2% to Rs 1,285.6 crore versus Rs 1,314.3 crore (US GAAP).

The company's revenues are expected to go down 3.6% to Rs 6,912.9 crore versus Rs 7,171.8 crore, QoQ. EBIDTA (earning before interest, depreciation, tax and amortisation) is seen going down 8.8% to Rs 1,713.9 crore from Rs 1879.8 crore, QoQ.

Margins are seen declining to 24.8% versus 26.2%.

Factors to watch

-Expect flat dollar revenues
-Lower volumes and pricing pressures
-3% benefit of cross currency movement
-Margins likely to be contained at 140 bps
-Net profit expected to decline 5% QoQ due to lower operating profits
-Forex losses seen at Rs 70-100 crore
-Forex losses follow cash flow hedging
-Tax rates will jump to 18% from 15% impacting net income
-Bad debt provisioning could increase

Key to EPS upgrade will be business visibility in core BFSI & MFGR vertical

What to Watch?
-Change in demand environment over past 3 years
-Status of vendor rationalisation
-Pricing negotiations with key clients
-Status of execution and profitability of large deals