TCS December quarter PAT seen at Rs 5,424 crore, up 2.6%; stock slips 2%

Country's largest software services firm Tata Consultancy Services (TCS) is all set to announce its December quarterly earnings on Tuesday post market hours amid pessimistic sentiment on Dalal Street.
 
Investors should not expect any surprises from the IT major as recent floods in China may have negatively impacted Q3 numbers as warned by company itself last month. On top of it, the third quarter traditionally remains a weak quarter on account of furloughs and less number of working days.

Brokerage firm Angel Broking  expects the company to post 0.2 per cent sequential growth in US dollar revenues to $3,935 million, mostly impacted by cross currency impact.

"In rupee terms, revenues are expected to come in at Rs 24,563 crore, up 3.1 per cent quarter-on-quarter," said brokerage in a research note.

"EBITDA margin is expected to show an uptick of ~47 basis point quarter-on-quarter to 29.2 per cent. Consequently, PAT is expected to be at Rs 5,424 crore, an up-tick of 2.6 per cent q-o-q," added brokerage.

Angel Broking maintained its 'accumulate' rating on the stock, with a price target of Rs 2,833, an upside of 12.5 per cent against Monday's closing.

Broking firm Religare Securities expect the IT major to record 1.5 per cent of sequential revenue growth as compared to 3 per cent logged in the September quarter, while Edelweiss Securities expects this to come in at around 0.9 per cent.

The stock of the TCS ended 2.20 per cent down at Rs 2324.05 on the Bombay Stock Exchange (BSE) ahead of Q3 earnings.