TCS Q4 results 2018: Share price marginally higher ahead of Q4 earnings

TCS Q4 results 2018: MOSL has a neutral rating on the stock. The stock trades at 19.8x FY19E and 18x FY20E earnings, it said.

TCS Q4 results 2018: TCS consolidated revenue came in at Rs 30,904 crore in Q3FY18. Image source: Reuters

TCS Q4 results 2018: Tata Consultancy Services (TCS) share price was flat on Thursday ahead of IT major's March quarter results wherein it is expected to report a marginal dip in net profit quarter-on-quarter at Rs 6740 crore against Rs 6,545 crore reported in the December quarter of FY18. At 11:00 am, the stock was trading at Rs 3185.70, up 0.8 per cent on the BSE.

Brokerage Motilal Oswal Securities sees revenue growth for TCS to pick up in 4QFY18 to 2.2 per cent QoQ in constant currency (CC) terms from 1.3 per cent in the previous quarter, led by ramp-up of recently-won deals. With cross-currency tailwinds of 110 basis points, it expects dollar revenue growth of 3.3 per cent QoQ.

"Our EBIT margin estimate for Q4 stands at 25.5 per cent (+30bp QoQ), led by currency benefits. However, we expect margins to take a hit Q1FY19 onwards as lower margin deals start to hit profitability, in addition to the usual headwinds of visa expenses and wage hikes," it said.

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In the December quarter, TCS posted 3.94 per cent dips in consolidated net profit at Rs 6,545 crore from Rs 6,814 crore in the corresponding period of the previous year. However, the Q3FY18 net profit witnessed a sequential growth of 1.31 per cent as against net profit of Rs 6,460 crore in the preceding quarter.

TCS Q3 results 2018: Watch Video

TCS consolidated revenue came in at Rs 30,904 crore in Q3FY18, registering growth of 3.86 per cent year-on-year (YoY) and 1.18 per cent quarter-on-quarter (QoQ) basis.

MOSL has a neutral rating on the stock. The stock trades at 19.8x FY19E and 18x FY20E earnings, it said.

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