Tata Consultancy Services (TCS),
India’s largest IT services provider’s fourth quarter numbers for the
FY2016 will be one of the most awaited event today for two reasons.
The company’s share price was trending at Rs 2,469.45 per share, down by 2.13% as the markets opened.
The
first will be for the performance of the company, especially after its
competitor Bengaluru-based Infosys has reported a stellar performance,
but more importantly, the Street and analysts will want to hear the
management on the $940 million notice fine on the company by a Federal
Jury in the US.
Based on the comment made by
management in the last few months, this quarter could well be bottoming
out quarter in terms of performance. The company has been missing
expectations for the last six quarters, owing to softness in telecom,
oil and gas and its insurance platform Diligenta. One also has to
remember that Q3 and Q4 are traditionally weak quarter for the industry and for TCS in particular due to holidays and furloughs in certain sectors.
Revenue: The
Street is expecting TCS to report US dollar revenue growth in the range
of 1.2-2.2% on a quarter-on-quarter basis. Unlike Infosys, TCS does not
provide for revenue guidance and hence the management’s commentary will
be important to gauge demand trends for FY17. For the full year,
revenue is seen growing by 7% much lower than Infosys 9.1%. Profit after
tax is expected to be up 2.4% q-o-q.
Digital revenue: TCS
is among the top IT players to report 13% of its revenue coming from
digital. In the last quarter, the company shared its digital strategy
with analysts.
More details and the growth for
FY17 in this segment will be watched for. The company has stated in the
past that digital is growing at a much faster rate.
No comments:
Post a Comment