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TCS says full-year revenue to be hit by currency movements

Tata Consultancy Services Ltd seems to be on track to report a disappointing full year. The company warned in an analyst meet that its revenue would be impacted by foreign exchange movements.

However, such cross currency movements are unlikely to affect its profits much.

At its analyst meet today, TCS stated that its final quarter revenue, in dollar terms, would be impacted by cross currency movement to the tune of 2 percentage points. In the last quarter, the company had reported an impact of 2.4 percentage points.

In rupee terms, growth would be hit by 2.75 percentage points.

The impact on profits would be much less. At EBIT margin level, the impact would be 40 basis points.

tcs-ceo-chandrasekaran

Retail, high tech and manufacturing are expected to gather pace in Q4FY15 after a muted Q3FY15. Banking and financial services (BFS) would be in line, while insurance would remain weak. The company also said the first two months of the year have seen slow start and would update investors about client budgets in its Q4FY15 conference-call.

After the recent softness seen in retail, manufacturing and high tech in Q3FY15, momentum has once again picked up in these sectors in the final quarter. However, weakness in insurance is likely to persist, the company added.

Telecom is expected to be lower than the company’s average, while energy would be impacted by the global environment.

Geographically, Europe is expected to fare above the company average, while India is likely to be flattish to marginally positive.

TCS also maintained its broad margin band of 26-28%.

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