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TCS Q3 profit seen up 4%, FY16 outlook key: CNBC-TV18 poll

Analysts expect 2.9 percent quarter-on-quarter growth in rupee revenue, and 0.5 percent rise in dollar revenue at USD 3.948 billion (In Q3FY14, dollar revenue growth was 3 percent).

Tata Consultancy Services  (TCS), the biggest software services exporter in India, will announce its third quarter earnings on Thursday. Profit after tax of the company is expected to increase 3.9 percent sequentially to Rs 5,496 crore on revenue of Rs 24,498 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

The growth in bottomline may be mainly due to other income, say analysts, who expect 2.9 percent quarter-on-quarter growth in rupee revenue, and 0.5 percent rise in dollar revenue at USD 3.948 billion (In Q3FY14, dollar revenue growth was 3 percent).

Dollar revenue growth in constant currency is seen at 2.5 percent in December quarter compared to 2.9 percent growth in constant currency in same quarter last fiscal.

Overall, December quarter is expected to be a muted one which is already priced in, feel analysts. According to them, the key factor to watch out for will be FY16 outlook.

The street expects relatively cautious commentary on demand environment due to conservatism. In its analysts meet on December 12, TCS had warned of weak revenue growth for the December quarter, arising from seasonality and pressure in its banking, financial services and insurance (BFSI) business. December season is usually weak for IT companies because of the year end vacation season. However, the company maintained its operating margin guidance of 26-28 percent.

Earnings before interest and tax (EBIT) may grow 3.7 percent quarter-on-quarter to Rs 6,630 crore and margin may expand marginally to 27.06 percent from 26.85 percent during the same period due to currency depreciation.

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