Q1FY23 Preview: TCS: Revenues seen at Rs523,874 million, PAT at Rs97,559 million

7 Jul 2022 , 12:34 PM

Result date: 8^th July, 2022
Recommendation: Add
Target price: Rs3,450

Tata Consultancy Services (TCS), the number 1 IT services company of India is set to announce a record-high order book when it announces its results for the June 2022 quarter on July 8.

Analysts at IIFL Capital Services expect the company to clock in revenue growth of 3.6% on a sequential basis (in constant currency terms). Strong order book and continued demand momentum for core transformation will be the key factors driving this growth.

They expect margins to decline by 170 basis points sequentially, due to the impact of wage hikes, visa costs and increasing travel costs.
The company’s Profit After Tax (PAT) could decline 1.7% sequentially to Rs97,559 million.
 
Important management insights to watch out for:

• Deal win momentum and nature of deals
• Any early signs of current macro environment impacting the demand environment or decision-making
• Supply-side challenges
• FY23 outlook on growth and margins

 

	June 2022 estimates	QoQ change	YoY change
Revenue (US$ mn)	6,786	1.3%	10.3%
Revenue (Rs. mn)	523,874	3.6%	15.4%
EBIT (Rs. mn)	121,685	(3.6)%	5.0%
EBIT margin	23.2%	(170) bps	(230) bps
Profit After Tax (Rs. mn)	97,559	(1.7)%	8.3%
EPS (Rs.)	26.7	(0.6)%	9.3%

Source: IIFL Research