TCS, country's largest software exporter, is likely to report flat growth in sequential revenue when it reports its fourth quarter earnings on Thursday. Unfavourable currency (dollar, euro, pound) movement will dictate the results of the company.
The IT firm may report Rs 24,498.7 crore in Q4 revenue compared with Rs 24,501.1 crore sequentially, reports analysts told >The Economic Times website. The firm's net profit may fall by 0.9 per cent to Rs 5,396.4 crore, they added.
Software exporters will feel the impact of cross currency movement on their earnings in the fourth quarter.
The pound fell by 4 per cent and the Euro by 9.8 per cent against dollar compared with the third quarter. TCS' revenues will take a hit when the company converts the revenues earned in euro and pound to dollar.
Earlier, the company said currency fluctuations would reduce its margins by 40 basis points quarter-on-quarter in the fourth quarter. Its fourth-quarter revenue was expected to be in line with last year's trend.
TCS reported a 1.9 per cent sequential revenue growth in US dollar terms for the fourth quarter of 2013-14 which would put the January-March quarter growth at below current estimates, analysts said.
"Overall, Q4 is likely to be another soft quarter from TCS, and with expectations already high, we see downside risks to earnings," financial services provider Religare said in a note. The broker downgraded the stock to "hold" from "buy" on March 9, 2015.
The TCS stock closed 0.96 per cent or 25.55 points lower at Rs 2624.70 on the BSE. The Sensex closed 244 points lower at 28,799 on Wednesday.