Target price: Rs3,450
India’s apex IT services firm, Tata Consultancy Services (TCS), will report its results for the September quarter of 2022 today. It is likely to put on a healthy show, reflecting the solid surge in deals.
IIFL Securities analysts forecast 4.0% sequential revenue growth in constant currencies, driven by previously won deals and continued demand for core transformation. They expect a sequential increase in margins of 90 basis points, due to the absence of visa fees, the absorption of salary increases deployed in the first quarter and operating leverage.
Important management information to monitor:
Dynamism of the agreements concluded and nature of the agreements
Comment on the impact of the current macro on demand/decision making
On the supply side (including attrition and hiring)
· Potential impact of holidays in Q3.
September 2022 estimates
|Revenue (millions of dollars)||6,900||1.8%||8.9%|
|Revenue (Millions of Rupees)||550 590||4.4%||17.5%|
|EBIT (millions of rupees)||131,919||8.3%||9.9%|
|EBIT margin||24.0%||90 basis points||(160) basis points|
|Profit after tax (Rs. mn)||104 153||9.9%||8.2%|
Source: IIFL Research