The share price of the The IT major, TCS is trading higher today ahead of the earnings announcement in the evening. The stock price increased 1% at open on January 9 on the day of the earnings and continued to gain. At 11.17 am, the company’s shares were 3% higher at ₹3,308.30, up ₹96.30 over the previous closing on January 6.
TCS will kickstart earnings season today and is expected to have seen modest growth in the quarter ended December 31, 2022. Brokerages expect the company to post a modest growth in revenue, while margins could remain flat.
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TCS will consider the third interim dividend for FY23 also on January 9. Last month, The company had fixed January 17 as the record date to determine eligible shareholders for the third interim dividend.
HDFC Securities expects TCS to report Q3 revenue of $6,958 million – an increase of 1.2% quarter-on-quarter and in rupee terms, revenue is expected to come in at ₹57,058 crore.
The brokerage expects moderate growth, aided by ramp up on large deal wins in the previous quarters, but margins could remain flat due to moderation in supply side constraints.
BNP Paribas has a buy rating for TCS with a target price of ₹3,314.65. “Downside risks to our DCF-based TP are: 1) sharper-than-expected decline in global economic activity and GDP growth, 2) margin pressure from higher competition, 3) moderation in demand leading to higher-than-expected impact on margin and 4) sustained appreciation of the INR vs the USD,” said the broekrage.
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