TCS Q4 Results Preview: What to Expect

Bangalore: Country's largest IT exporter TCS is likely to report self-effacing growth in its rupee denominated revenue for the March 2012 quarter bearing in mind the absence of depreciating trend in the rupee during the quarter and uncertainty over demand scenario in the West.

According to estimates of four brokers and the ET Intelligence Group's forecast the revenue of TCS will grow by a meager 0.5 percent to 13, 275.4 crore in the March quarter from the previous quarter. Net profit is likely to fall by 1.7 percent to 2838 crore. TCS will declare its fourth quarter numbers by Monday evening.

The growth was abrupt in the December 2011 quarter due to a sharp depreciation in the rupee against the dollar. Revenue had shoot up by 13.5 percent and net profit by 18.4 percent helped by 10 percent depreciation in the rupee. A weaker rupee enhances the performance of exporting companies by increasing realizations for every dollar of sales.

Edelweiss Securities in its latest results preview report mentioned, "Expect both revenues and margins to decline in rupee terms due to rupee appreciation and high lateral intake (of employees) not supported by strong volume growth.”

TCS is expected to report a better dollar denominated growth for the March quarter contrast to its closest peer, Infosys. According to the ET Intelligence Group's estimation, revenue of TCS will grow by over 3 percent to $2663.6 million. Infosys had earlier reported 1.9 percent drop in its dollar denominated revenue due to slower implementation of some its projects.

Although TCS does not offer guidance on its future performance, the management's commentary on the likely number of new recruitments for FY 13 and the number and the size of deals in the order pipeline will be vital in determining the demand visibility in the near term.