TCS Stock Continues to Rebound from 52-Week Low Ahead of Q2 Results; Here’s what to expect

Shares of Tata Consultancy Services (TCS) Ltd. is trading with gains of more than 2% on Wednesday, October 8, a day before reporting its results for the July-September period.

The stock has gained in two of three trading sessions so far this week and is up 4% during that time. Shares of the Tata Group’s largest listed entity are rebounding from their 52-week low of ₹2,866, to which they fell on October 1 this year.

According to a CNBC-TV18 poll, TCS is likely reporting 2% growth in US dollar revenue compared to the same quarter last year.

In rupee terms, growth is expected to be 2.5% compared to the June quarter.

Metric	Figure	Growth (QOQ)
Revenue ($m)	7,657	2%
Revenue (₹ CR)	64 160	2.5%
EBIT (CR)	15,950	Flat
EBIT margin (%)	25	19 basis points
Net profit (₹ CR)	12,422	3.1%

TCS is likely to report revenue growth of 1.2% sequentially in constant currency terms. At the bottom, BNP Paribas forecast growth of 0.2%, while Morgan Stanley expects the figure to be 1.7% from the June quarter. During the June quarter, TCS had reported a decline of 3.3% in its constant currency revenue.

Kotak Institutional Equities also anticipates an increase of $55 million in a phased manner from the BSNL deal.

EBIT margins for TCs are expected to see a marginal increase in the June quarter, according to the CNBC-TV18 survey. Nuvama, however, expects margins to decline by 50 basis points from the previous quarter due to the ramp-up of the BSNL deal and weakness in developed geographies.

Other key factors to watch include the prospects for deal wins going forward, the outlook for Europe, where the outlook remains challenging despite mega-multiples, continued recovery in the BFS segment, and discretionary spending trends.

Shares of TCS are trading 1.9% higher at ₹3,030. The stock has recovered its losses over the past month.