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TCS May Surprise Market With Revenue & Profit Blues- Growth Warning On The Way

TCS will be announcing its result today and most of the analyst is expecting slightly lower profit whereas $ revenue may increase in low single digit. I call Street expectation as over optimistic expectation. We all know that sterling pound is in downward spiral and it will dent both revenue and profitability as TCS do major business in UK. Middle East clients are cutting on IT spending and one of the examples is Saudi Arabia decided to cut down on expenditure.

Europe is still struggling and post UK exit from European Union, many companies which are based out of UK but having sprawling business in European Union based countries cut their investment due to clarity. The presidential election in US dented the government upgradation. We all know the state of Japan. The pharmaceutical sector may have shown some growth.

On top of that billions of $ worth of contracts are for renewal which may impact the growth. In my point of view, I am expecting that TCS will come out with both revenue & profit warning and contraction of margin. 

The situation will persist for next few quarters. It offers an opportunity for value buyer to accumulate TCS during sell off.

Disclaimer: Please consult your financial advisor before investing

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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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