Shares of Tata Consultancy Services Ltd (TCS) traded range-bound ahead of its Q4FY23 earnings, on Wednesday.
The street expect margins to increase by 30 to 50 basis points, with stabilising supply, declining attrition, better utilisation, and favourable currency effects driving this trend.
Given the time it takes to make decisions, analysts anticipate cautious management comments on customer spending. The Street will closely monitor any remark on the BFSI and hi-tech sectors to determine where growth may be slowing down soon.
According to analysts, in comparison to the previous quarter's revenue of ₹58,229 crore, the Indian software giant is predicted to report earnings of ₹59,504.96 crore. Earnings before interest and taxes (EBIT) is anticipated to increase from ₹14,284 crore in the December quarter to ₹14,896.41 crore. The review period's consolidated net profit is expected to increase to ₹11,535.41 crore from ₹10,846 crore in the prior quarter.
Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities said that all eyes on TCS Q4FY23 results, which will set a trend for the market and will be released today post markets. A subdued topline growth can be seen due to concerns on the US and Europe economy. Key focus would be on the company’s commentary on overall IT demand and spending budget post the collapse of the banking and financial sector in the US as Indian IT services companies are heavily dependent on the BFSI industry, so any spending cuts at clients' side in this sector would impact segment revenues.
“Long term investors will also be watching closely for the final dividend for the fiscal year 2023. Technically, the stock is witnessing pressure on the higher levels and upside is capped in the range of ₹3,250-3,300 in the best case scenario,” added Tapse.
Further, analysts said that no major traction is seen ahead of results.
"However, considering the recent movement, we have a positive bias where any dips can be considered as a buying opportunity. ₹3,100 - 3,130 is a buying zone on flip side 3,400 is resistance," Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.
According to Mingenie poll, 42 analysts recommend 'hold' rating on the stock.
