TCS Q4 results this week- Double-digit net profit jump eyed, helped by sales, big deals; here’s what to watch

TCS Q4 results this week: Double-digit net profit jump eyed, helped by sales, big deals; here’s what to watch

India’s largest IT company Tata Consultancy Services (TCS) is expected to report a double-digit jump in net profit for the fiscal fourth quarter, with estimates going as high as nearly 18% on-year, helped by strong sales and large deals momentum. TCS will kick-off earnings season with its Q4 FY23 results scheduled on 12 April, 2023. Its revenue for the January-March 2023 quarter may have risen as much as 17.6% on-year. The revenue growth would be driven by “spending on cloud and digital programs, cost take outs and wallet share/vendor consolidation gains”, said Kotak Securities.

What to watch from TCS Q4 FY23 financial results: Keen eye on deal wins

Brokerage Estimates for TCS Q4 FY23 financial results (on-year comparisons):

Axis Securities:

Revenue: Rs 59,456 core; up 17.5%

EBITDA: Rs 15,094 crore; up19.5%

PAT: Rs 11,488 crore; up 15.7%

HDFC Securities

Net sales: Rs 595.96 billion; up 17.8%

EBIT: Rs 149.62 billion; up 18.5%

APAT: Rs 112.27 billion; up 13.1%

Kotak Institutional Equities

Net sales: Rs 595,082 million; up 17.6%

EBITDA: Rs 161,847 million; up 16.9%

PBT: Rs 157,562 million; up 17.9%

ICICI Securities

Revenue: Rs 59,362.9 crore; up 17.3%

EBITDA: Rs 15,968.6 crore; up 15.3%

PAT: Rs 11,224.5 core; up 13.1%

Sharekhan

Sales: Rs 59,425 crore; up 17.5%

OPM: 27.3%

Net profit: Rs 11,662 crore; up 17.5%

Revenue: $7,229 million; up 8.0%

Elara Capital

Net sales: Rs 5,95,523 million; up 18%

EBITDA: Rs 1,59,600 million; 15%

Recurring PAT: Rs 1,14,460 million; 15%

BOBCAPS

Revenue: Rs 5,95,027 million; up 17.6%

EBIT: Rs 1,47,864 million; up 16.9%

PAT: Rs 1,16,030 million; up 17.0%

TCS Q4 FY23 growth from previous quarter: Currency, weak season to weigh

Sequentially, TCS earnings are likely to show weak growth, primarily due to currency headwinds, and less number of working days in the quarter. “We expect the company to report 1 per cent CC revenue growth for the quarter,” said ICICI Securities. “We expect 100 bps cross currency tailwinds due to GBP and EUR appreciation against US$. Hence, dollar revenues are expected to grow 2 per cent QoQ,” ICICI Securities added. Q4 is a seasonally weak quarter due to fewer working days and some furlough impact in January.

ICICI Securities said that there might be a minor impact on TCS’ Q4 numbers on account of a surprise top management reshuffle as well. Earlier in March, the company’s managing director & CEO for the last 6 years, Rajesh Gopinathan decided to step down from the company. Following this, the board of directors nominated K Krithivasan as the CEO designate with effect from 16 March 2023.