TCS to declare December quarter earnings today; factors to watch out for

"The last five-six quarters have not been good for TCS. They have not been able to beat the market expectations. Its nearest competitors Infosys and Cognizant are also growing well. They are picking up fast. Therefore, investors will closely monitor third quarter performance of TCS to look for future growth prospects," added Bandyopadhyay.

Here are key factors to dig out from the books of TCS:

1) Impact of cross-currency fluctuation on growth

Cross-currency headwind is a term used to describe possible losses due to volatility in various currencies.

While rupee depreciation will help TCS report improved margins, the movement of US dollar against other major currencies may balance out gains in terms of dollar revenues. During the quarter, the euro, pound and Australian dollar depreciated close to six per cent, five per cent and 7.8 per cent, respectively, against the US dollar.
 
"We expect muted growth... Large-caps are likely to report tepid dollar revenue growth of 0.3-1.1 per cent quarter-on-quarter with Chennai floods exacerbating the seasonal weakness in Q3, particularly for TCS and Wipro," reported PTI quoting Religare Securities.

2) Chennai Floods

TCS had already warned investors last month that the company may face 'material impact' due to floods in Chennai which in turn will affect the December quarter revenues.

Investors will closely watch how much loss the company incurred owing to one-off event risk of Chennai and how much of it will linger on in the coming quarters.

3) Digital revenues

Among four IT giants, TCS is riding the digital wave fastest. The company reported 10.3 per cent sequential revenue growth in digital business in constant currency terms in the second quarter.

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