TCS Q3: Analysts see profit down 3% to Rs 3410 cr
Tata Consultancy Services (TCS), the largest software services exporter in India, is set to declare its earnings for the third quarter ended December 2012 on Monday evening (after market hours). Analysts on an average expect profit after tax to go down by 3 percent quarter-on-quarter to Rs 3,410 crore in the quarter.
January 14, 2013 / 16:17 IST
Tata Consultancy Services (TCS), the largest software services exporter in India, is set to declare its earnings for the third quarter ended December 2012 on Monday evening (after market hours). Analysts on an average expect profit after tax to go down by 3 percent quarter-on-quarter to Rs 3,410 crore in the quarter.
Revenues in dollar terms are likely to rise by 3 percent QoQ to USD 2,939.5 million and in rupee terms, revenues are seen going up by 2.1 percent QoQ to Rs 15,950 crore in the third quarter of current financial year 2012-13.Analysts feel the three percent dollar revenue growth by company will not be industry leading. Hence, substantial beat over Infosys' 4.1 percent organic growth is unlikely, analysts say. TCS management had guided for lower than second quarter growth in third quarter of FY13. Analysts feel the company could see profits decline sequentially due to margin decline and forex loss.Earnings before interest and tax (EBIT) are likely to increase 1.1 percent QoQ to Rs 4,224 crore in the quarter. But EBIT margin is seen going down by 25 basis points to 26.5 percent in the October-December quarter as against 26.75 percent in previous quarter. According to analysts, the management commentary on calendar year 2013 will be key, which is expected to be positive.Infosys, India's second largest software services exporter, surprised the street on Friday, with better-than-expected results for the third quarter and also raised its full year guidance, contrary to most analysts who were expecting a cut. Consolidated net profit stood at Rs 2,369 crore, unchanged quarter-on-quarter (down 0.1% from year ago), while revenue rose near 6 percent sequentially (12 percent YoY) to Rs 10,424 crore in October-December. The stock had rallied 17 percent after stellar performance.The street has been in a mood to switch to Infosys after stellar performance on Friday as expects see more upside. According to the street, however, valuation headroom is seen limited for TCS.Also Read:
Is it time to shift out of TCS into Infosys?TCS is trading at 17 times FY14 earnings while Infosys is currently trading at over 15 times FY14 earnings. Several brokerage houses upgraded on Infosys including CLSA and JP Morgan post Q3. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
