TCS will announce December quarter results on January 12. The market is keeping a close eye on this. TCS is the largest IT company in the country. Its results will give indications about the performance of the IT sector. TCS has increased focus on Artificial Intelligence. The company has planned to invest heavily in AI.
Revenue growth may remain flat
TCS’s revenue growth in the December quarter is expected to be flat (unchanged) on quarter-on-quarter basis. The reason for this is that companies all over the world including America are not spending much on technology right now. In the third quarter, the company’s revenue in dollars may increase by 0.3 percent to $ 7482 million. In the second quarter it was $746.6 million.
Expected 5.8 percent increase in profit
The company’s revenue in rupee terms may increase by 1.4 percent on quarter-on-quarter basis to Rs 66,728 crore in the third quarter. EBIT is expected to be Rs 16,800 crore, up from Rs 16,565 crore in the second quarter. EBIT margin is expected to remain unchanged at 25.2 per cent. Net profit is expected to increase by 5.8 percent quarter-on-quarter to Rs 12,771 crore.
Growth of Indian business may decrease
TCS’s constant currency (CC) revenue growth is expected to be around 0.5 percent on a quarter-on-quarter basis in the third quarter. Opinion of brokerage firms is divided regarding the company’s December quarter results. Kotak Institutional Equities believes that CC growth may remain flat in the December quarter. It has estimated the growth of international business to be 0.7 percent on quarter-on-quarter basis. But, Indian business may see a decline of 4.5 percent on quarter-on-quarter basis.
Market’s eyes will be on AI monetization commentary
Ambit Capital says that there may be a change in the earlier estimates of TCS regarding the revenue growth of international business. It may see a sharp jump in FY26. Earlier the company had said that international revenue growth in FY26 will be higher than the level of FY25. The market’s eyes will be on the company’s commentary regarding AI monetization. The company has completed more than 5,000 AI engagements. The share of AI related services in its annual revenue has reached about $ 1.5 billion.
Focus has increased on high growth technology segment
Apart from AI, the contribution of new-age services like cyber security and allied digital operations has reached about $ 11 billion in the company’s annual revenue. This indicates that the company is increasing its focus on high-growth technology segments. In the second quarter, the company had said that it wants to become the world’s largest AI-based technology services company. TCS shares closed 0.27 per cent higher at Rs 3,212.60 on January 9. The company’s shares have fallen by more than 20 percent in the last one year. During this period, Nifty ID index has fallen by more than 12 percent.