TCS, in its December quarter (Q3FY18) call, sounded optimistic about 2018, stating that problems that were plaguing a number of its verticals and geographies are behind it. The optimism also stemmed from the general improvement in macro-economic outlook in the developed world, especially in the US.
“We have factored in 1.5% quarter on quarter (QoQ) CC (constant currency) revenue growth considering that Q4 tends to be a seasonally weak quarter. All major currencies including the Euro, UK Pound, JPY, AUD, BRL and AUD have appreciated against USD in Q4FY18, which we believe, will lead to around 150bps cross-currency tailwind, thereby resulting in revenue growth of 3.0% in USD terms,” Nirmal Bang Equities said in IT sector update.
The brokerage firm, however, believe that appreciation of the INR against the USD will offset some cross-currency gains leading to a 2.6% growth in INR terms.
Revenue growth for TCS is expected to pick up in Q4FY18 to 2.2% QoQ in CC terms from 1.3% in the previous quarter, led by ramp-up of recently-won deals. With cross-currency tailwinds of 110bp, we expect USD revenue growth of 3.3% QoQ, the brokerage firm Motilal Oswal Securities said in March quarter result preview.
Meanwhile, with Rs 6.19 trillion market capitalisation, TCS has surpassed Reliance Industries (RIL) to become the country’s most valued firm again. RIL have market capitalisation of Rs 5.92 trillion at 01:37 pm, the BSE data shows.