“We expect constant currency (cc) sequential revenue growth of 0.9% with 80 basis points of cross currency tailwind translating into 1.6% QoQ dollar revenue growth,” said JM Financial Institutional Securities in a report. The brokerage expects a $75-million contribution from the BSNL deal.
In rupee terms, revenue may rise by 2.3% to ₹64,065.8 crore, helped by cross-currency tailwinds. Net profit is likely to grow by 3.9% to ₹12,514.1 crore.
“Expect sequential weakness in the September quarter due to slowdown in the UK business. BSNL deal ramp-up continues to provide support to growth, but overall growth will be weak in the quarter,” said HSBC Securities and Capital Markets (India) in a preview report.
The operating margin may either stay flat or grow by 20-40 basis points sequentially for the September quarter. The pressure on the margin due to project ramp-ups is likely to be offset to some extent by the absence of visa costs and wage increases. During the previous quarter, TCS had reported a 130 basis points sequential fall in the margin at 24.7% in the June 2024 quarter.
Investors will keep a watch on the management commentary regarding the recovery in discretionary spending by clients and the trend in new deal wins. “Key things to watch out for are demand trends in key verticals like BFSI, Retail, Hi-Tech, Manufacturing, and Communications, pricing environment considering macro uncertainties, margin lookout and hiring plan,” said Emkay Research in a report. TCS had reported $8.3 billion of new deal wins in the previous quarter.
