Tata Consultancy Services (TCS) share were not in major demand on Friday, just like its competitor Infosys which will also be announcing its Q4 result on the same day. The investors were playing a wait and watch game with TCS on Friday. At around 1052 hours, TCS was trading at Rs 2,024.90 per piece up by 0.29% on Sensex. However, the stock did jump to an intraday high of Rs 2040 per piece surging by just 1% in early hours of opening. Talking about TCS Q4FY19 result, Motilal Oswal said, "We expect TCS to grow its constant currency revenues by 2% QoQ (12.1% YoY). 4QFY19 is a seasonally weak quarter compared to 3Q. Most pockets for TCS are doing well, with the exception of Automotives and Hi-Tech. We expect USD revenue growth of 2.7% QoQ, on the back of 70bp tailwind from currencies."

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Despite 1.3% QoQ appreciation of the INR, Motilal says, "our EBIT margin estimate of 25.8% is 20bp higher QoQ as pressure from escalated sub-contractors has abated for TCS. Our PAT estimate of INR78.4b is lower QoQ by 3% due to lower total other income." Stable revenue, dip in EBITDA margin and offsetting the impact of Indian rupee are expected by majority of experts for TCS in Q4FY19. 

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In Edelweiss Securities view, "We expect the strong demand environement to continue and TCS to deliver 2% cc revenue growth (2.4% in USD terms owing to cross-currency tailwinds). EBITDA margin is expected to dip to 26.8%, pushed down by INR appreciation (40bps) that is likely to be offset by operational gains. Commentary on the macroeconomic environment, spends by BFSI and Retail clients, growth in digital, and outsourcing in Europe are the key variables."

Meanwhile, IDBI Capital said, "We forecast CC revenue growth of 2% QoQ led by continuation of ramp-up of large deals and forecast cross-currency benefit of ~40bps. We forecast EBIT margin to improve by by ~25bps QoQ. We expect operational efficiencies led by revenue growth to offset the impact of INR appreciation."

 

In Q3FY19, TCS recorded net profit of Rs 8,105 crore which was higher by 24.10% compared to the profit of Rs 6,531 crore witnessed in the same period a year ago. Q3FY19 was gradually up by 2.44% as against net profit of Rs 7,927 crore of Q2FY19. Meanwhile, TCS' revenue came in at Rs 37,338 crore during the quarter, rising by 20.81% from Rs 30,904 crore in Q3FY18 and also up by 1.31% from Rs 36,584 crore in Q2FY19.

During Q3FY19,  revenue growth continued to accelerate in BFSI (+8.6% vs +6.1% in Q2). Growth was led by Energy Utilities (+18.1%), Life Sciences & Healthcare (+15.7%)' Communications & Media (+10.8%) and Retail & CPG (+10.5%).