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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