TCS Q1 revenues seen up 12% to Rs 14,806 cr

Country's largest software services exporter Tata Consultancy Services (TCS) will announce its first quarter results tomorrow after market hours. Analysts on average expect the profit after tax to grow by 10.8% quarter-on-quarter to Rs 3,250 crore in the quarter ended June 2012, according to CNBC-TV18 estimates.

Dollar revenues are expected to go up by 2.5% to USD 2714 million from USD 2648 million while revenues, in terms of rupee, are seen going up by 11.7% to Rs 14,806 crore from Rs 13,259.3 crore during the same period.

Analysts expect a growth of 10.3% QoQ in earnings before interest and tax (EBIT) of Rs 4,050 crore. EBIT margin is seen declining at 27.35% versus 27.7%.

Strong Execution vs premium valuation?

Execution has been strong and much higher than peers. In the financial year 2011-12, TCS showed a volume growth of 23% while its rival Infosys 11%. Now analysts believe FY13 will be the third consecutive year that TCS will beat Infosys.

Q1 expectations

Analysts expect constant currency growth around 4% (likely to be the highest). Volume growth may be higher in Q1 as compared to Q4 (3.3%)

EBIT margins are seen slightly lower by 35 basis points. Impact of wage hike and higher visa cost has almost mitigated due to rupee depreciation.

Company had announced 6- 8% wage hike for Indian employees and 2-4% for employees in developed countries.

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