Technical Analyst Nilesh Jain, who is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking says that TCS looks strong on the charts. Ahead of results, Nilesh says one can expect positive momentum to continue towards Rs 3360/ Rs 3400. The immediate support is placed at Rs 3270. Overall, the results in the IT sector is likely to be better, says Nilesh

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Avinash Gorakshkar, Director Research at ProfitMart Securities said that TCS is Forming a nice flag pattern and only above Rs 3340, will it give a breakout. He said the target will be Rs 3600.

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On its part, Kotak Institutional Equities says it expects strong c/c revenue growth of 4.2% to be driven by ramp-up of Postbank and Prudential Financial deals. These deals will likely contribute 2% to March 2021 quarter revenues. Continued spending by clients on digital priorities and large deal ramp up will drive strong growth. Kotak said, "On profitability we expect EBIT margin to increase sequentially powered by leverage from growth and increase in utilization rates. TCS absorbed the impact of wage revision in the December 2020 quarter and does not have any incremental headwinds in the March 2021 quarter."
Kotak Institutional Equities indicated that TCV of deals will be robust aided by core transformation and digital deals. While TCS does not guide, management may express confidence on achieving comfortable double digit growth in FY2022E and sustained profitability.

Investor must focus on:

(1)   FY2022 revenue outlook
(2)   outcome of the annual budgeting exercise of clients and its implications for TCS
(3)   longevity and magnitude of opportunity from the aggressive cloud shift by clients
(4)   decision making time on large deals
(5)   supply side strength, magnitude of wage revision and its implications for margins
(6)   longer term impact from changes in delivery model, contractual structures, composition of IT spending to name a few

Antique Stock Broking forecasts constant currency growth of 4% QoQ in 4QFY21. Expect USD revenue growth to be 5% QoQ, with cross currency tailwind of 100bps. The strong results were helped by ramp-up of two large deals -Prudential financial and Postbank Systems. Expect margins to remain flat as headwinds from deal ramp up and INR appreciation should get offset by operational efficiency and strong growth.

Key investors focus areas in Q4 FY21 of TCS:

Antique says Commentary on demand trends, deal wins and outlook for FY22