TCS shares trade flat ahead of Q4 result announcement; here is what to expect

TCS Q4, TCS share price NSE BSE: The fourth quarter earnings season for India Inc (Q4 FY24) will officially kick off today (April 12) with the IT services behemoth Tata Consultancy Services (TCS) slated to announce its financial results for the quarter ended March 31 post-market hours. 

Shares of the company were trading flat with a positive bias at Rs 3,998.20, up 0.39 per cent on the BSE at around 11:00 am. 

Analysts at IncRED Equities, in the earnings preview note, said they expect Tier-I IT services companies to report an average constant currency (CC) revenue growth of 0.1 per cent QoQ in 4QFY24F, driven by the reversal of furloughs in the banking & financial services (FSI) as well as hi-tech & manufacturing verticals, offset by continued softness in discretionary spending. 

Reported growth, in US dollar terms, could be higher as the US dollar (US$) depreciated by an average of 2.1 per cent and 0.9 per cent against the GBP and EUR, respectively.

Infosys, Tech Mahindra, and LTIM revenues could decline sequentially; Wipro’s IT services revenue growth could be flat QoQ, while Tata Consultancy Services’ (TCS) growth could be aided by the ramp-up of deals. Tier-II companies’ US$ revenue growth could be higher at an average of 2.5 per cent QoQ, led by L&T Technology Services (LTTS; aided by SWC seasonality) and Persistent Systems (PSYS), the brokerage added.

Analysts at JM Financial expect TCS' revenue growth in constant currency terms at 1 per cent for the quarter under review, with 30 basis points of cross-currency tailwinds translating into 1.3 per cent QoQ US dollar revenue growth. The brokerage expects a nearly 20-bps expansion in EBIT margin to 25.2 per cent, leading to better utilisation and lower sub-con expenses, offsetting lower margins from the BSNL deal.

"We have built a c. USD 100 million+ contribution from BSNL," the brokerage added.