KR Choksey and Securities has come out with its second quarter (July-September) earnings estimates for the information and technology sector. The brokerage house expects Tata Consultancy Services (TCS) to report a 6 percent growth quarter-on-quarter (growth of 14 percent year-on-year) in net profit at Rs 5345 crore.
Sales are expected to increase by 8 percent Q-o-Q (up 14 percent Y-o-Y) to Rs 23985 crore, according to KR Choksey and Securities.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 8 percent Q-o-Q (up 3 percent Y-o-Y) to Rs 6852 crore.
KR Choksey and Securities on Tata Consultancy Services:
Organic growth is likely to be 4.5 percent Q-o-Q and incremental revenue from Japanese JV will be USD 100 million Q-o-Q.
Japanese JV operates at relatively very low margin which will compress overall margin of the company.
Benefit from lower depreciation charges will be neutralised by lower forex gain sequentially.
Key factors to watch out for in the result are traction in digital space, large deal signing activity and the management outlook for margins in H2 FY15E.
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