TCS is likely to report tepid July-September quarter. According to CNBC-TV18 poll, the technology major's net profit may fall 0.9 percent to Rs 6260 crore in Q2FY17 from Rs 6317 crore in last quarter. Its dollar revenue may rise marginally to 1.8 percent to USD 4440 million compared to USD 4362 million while in rupee terms it may be up 1.5 percent at Rs 29738 crore versus Rs 29305 crore quarter-on-quarter.
During the quarter, TCS's EBIT may stand at Rs 7530 crore from Rs 7374 crore or at 25.3 percent versus 25.2 percent (QoQ).
The company has already warned the maket about its customer outlook marked by abundant caution. TCS had also said that it was experiencing holding back of discretionary spending particularly in BFSI in US resulting in sequential loss of momentum in BFSI. TCS has highest exposure to BFSI amongst large cap IT company at 40 percent.
According to analysts polled by CNBC-TV18, TCS Q2 constant currency growth is seen at 2.5-2.6 percent versus 3.1 percent (QOQ), despite the fact that September quarter traditionally benefits from seasonal factors including higher working days and start of projects.
Its full year margin guidance band of 26-28 percent may be at risk, this quarter it will be lower due to lower growth and cross currency headwinds. Q1FY17 margins at 25.16 percent were below the guided band due to wages. It has 13 percent exposure to British pound which has seen an average depreciation of 8.5 percent.
Key headwinds#Poor BFSI growth #Pre-election caution leading to project pushouts#GBP depreciation resulting in cross currency headwinds #Discretionary pullbacks in sectors
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