Tech giant TCS expects second interim profit on October 10. What to expect in Q2FY23?

Last week, on Friday, in its regulatory filing, TCS stated that the meeting of the board of directors of Tata Consultancy Services is scheduled to be held on Monday, October 10, 2022.

In its October 10 meeting, TCS said its board will approve and list the company’s standalone and consolidated financial results for the quarter and six months ending September 30, 2022 under Indian accounting standards.

Also, according to TCS, the board will “consider declaring second interim dividend to equity shareholders.”

“The second interim dividend, if declared, will be paid to the equity shareholders of the company whose names are included in the company’s register of members or stock records as beneficial stockholders as on Tuesday, October 18.

Dividends are an incentive that a listed company distributes from profits to existing shareholders.

In Q1FY23, TCS paid its first interim dividend. ₹8 in equity share for the current financial year. Total equity dividend percentage for June 2022 quarter stands at 800%.

In the last financial year, TCS paid a total dividend. ₹43 in equity share. The company’s shareholders stopped paying-out ₹38,010 crore at 12.2% YoY. The payout includes dividends (including unpaid dividends), buybacks and taxes.

For the first quarter of FY23, TCS posted solid earnings ₹52,758 crores ₹45,411 crore in Q1FY22. Constant currency revenue growth at 15% YoY. Pat stopped ₹ ₹9,478 crores ₹9,008 crore in Q1FY22. The company’s net margin stood at 18% in Q1FY23. Operating margin declined 2.4% yoy to 23.1% in the quarter.

On September 30, TCS shares closed at ₹3,004.60 marginally higher on the BSE. TCS is the second highest valued company in terms of market share. Currently, the market estimate is around . ₹10,99,398,58 crores.

What to expect from TCS in Q2FY23?

In its Q2 preview report for the IT sector on September 29, Kotak Institutional Equity analysts Kawaljeet Saluja and Sathishkumar S said, “On the strength of the season and growth in digital services, we forecast a strong sequential revenue growth of 3.1% led by cloud. Cross- currency headwinds of 220 bps qoq and 540 bps yoy will be very high. EBIT margin will increase from the lows from the June 2022 quarter. This will be driven by the wage revision in the previous quarter. and increased travel and duty costs.”

The analysts added, “We expect modest growth in TCV yoy. We expect the number to be in the range of USD 8-8.5 billion. Focus on furloughs will be high in the December 2022 quarter. Industry has escaped this impact due to heavy customer churn in the last two years.” Because of cost and great deal.

According to analysts, expect investors to focus on:

– Areas of cost caution and customer backlash;

Segments/constants showing poor spending patterns;

– How does the current slowdown and possible recession differ from the past?

– A large deal, especially in consolidation agreements, pressure from companies to get price increases, loss rates, especially on the spot and

– Lifts to protect margins against continued wage inflation and marginal benefit from pricing.

Kotak Institutional Equity analysts have given ‘ADD’ recommendation on TCS stock. You have set a target ₹3,400 for this IT giant.

Disclaimer: The opinions and recommendations expressed above are those of individual analysts or brokerage firms and not of Mint.