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TCS share trading flat ahead of Q1 earnings, here's what to expect

TCS share trading flat ahead of Q1 earnings, here's what to expect

TCS stock fell 0.12% to Rs 3,271 against previous close of Rs 3,275.30 on BSE. Total 0.33 lakh shares changed hands amounting to turnover of Rs 10.76 crore

Share of Tata Consultancy Services (TCS) was trading flat ahead of the IT firm's first quarter set to be announced today. TCS stock fell 0.12% to Rs 3,271 against previous close of Rs 3,275.30 on BSE.

Total 0.33 lakh shares changed hands amounting to turnover of Rs 10.76 crore. Market cap of the IT firm stood at Rs 12.09 lakh crore.

The IT stock hit 52 week high of Rs 3,399 on June 25, 2021 and fell to 52 week low of Rs 2,125 on July 24, 2020. TCS stock trades 3.97% away from 52 week high of Rs 3,399.

The large cap share trades higher than 50 day, 100 day and 200 day moving averages but lower than 5 day and 20 day moving averages.

The share has gained 47.54% in one year and risen 14% since the beginning of this year.

Here's what brokerages expect from the IT behemoth's first quarter earnings.

ICICI Securities expects net profit to rise by 35.7 per cent year-on-year to Rs 9,512.6 crore in Q1 led by higher other income. In same quarter last year, the firm reported Rs 7,008 crore profit. On a sequential basis, profit after tax may rise 2.9 per cent from Rs 9,246 crore in the March quarter of FY21.

Global brokerages Nomura and HSBC see profit after tax rise by 33 per cent and 33.5 per cent to Rs 9,320.2 crore and Rs 9,356, respectively. Sequentially, the profit is expected to remain flat.

At the lower end of the spectrum, Jefferies pegs PAT at Rs 9,002.5, falling 2.6 per cent quarter-on-quarter (QoQ).

ICICI Securities projects revenue (in rupee terms) to jump 20 per cent YoY and 5.3 per cent QoQ to Rs 46,042.7 crore, led by expected improvement in demand from BFSI, healthcare and retail, acceleration in digital technologies and ramp-up of deals.

Nomura sees TCS earnings before interest and tax (EBIT) margin to fall 80 bps on a QoQ basis to 26 per cent from 26.8 per cent.

On an annual basis, EBIT could expand by 240 bps from 23.6 per cent posted a year ago. "Sustainability of the EBIT margins in light of recovery in travel costs and rising supply-side pressures is a key monitorable for the investors," Nomura said.

In Q4 of last fiscal, Tata Consultancy Services reported a 14.9 per cent rise in consolidated net profit to Rs 9,246 crore from Rs 8,049 crore in the year-ago period.

Revenue rose 9.4 per cent YoY to Rs 43,705 crore from Rs 39,946 crore. Order book for the quarter was $9.2 billion, amounting to highest ever TCV in a quarter.