Tata Consultancy Services (TCS) will kick off the March quarter earnings season on April 12, 2023, with investors watching out for the software exporter's commentary on the growth outlook in a depressing macro backdrop.
Tata Consultancy Services (TCS) is likely to report a 14-19% year-on-year (YoY) rise in net profit for the March quarter on a 17-18% growth in sales. Ebit margins are seen expanding and coming in excess of 25% while order wins are likely in the $8.5-10 billion range.
In terms of revenue growth in CC terms, Nuvama Institutional Equities sees TCS reporting 1.4% sequential growth, which would be the highest among its peers.
Analysts expect a cautious management commentary on client spending, given delays in decision-making. The market would be keenly following any commentary on BFSI and Hi-tech verticals to gauge where the growth may take a hit in the near term.
- CY23 IT budget closure and pace of decision making and ramp up of budgeted spends
- Demand trends in key verticals like BFSI, retail, manufacturing, and communications
- Deal intake in Q4 and commentary around the deal pipeline
- Pricing environment considering macro uncertainties and cost pressure amid high inflation
- Margin outlook and levers to increase margin back to 26-28% range
- Hiring plan
Apart from the numbers, market participants would be interested in the TCS' growth outlook (health of various verticals and geographies, deal-making pace, key priorities moving ahead, and strategy change, if any), especially against the backdrop of a management change at the top.
TCS may recommend a final dividend for FY23 today. The company board would recommend the dividend for the approval of the shareholders at the ensuing 28th Annual General Meeting.
ICICI Securities is expecting TCS to announce a share buyback amounting to Rs 20,000 crore, as its last buyback (Rs 18,000 crore) concluded in the December quarter at a price of Rs 4,500 per share.