Q4 IT Results LIVE | TCS & Infosys announce numbers of Q4 FY19

It is an interesting day ahead for the business world as the country’s largest IT services provider TCS and second largest IT services firm Infosys would be announcing the annual results on Friday. The two IT major would be announcing the results for the first time on the same date, as Mumbai based TCS has deferred its results this time around. Historically, TCS used to announce results ahead of second-placed Infosys. Watch this space and don't miss any of the LIVE updates.

DH brings to you key things to look out for in each company’s results:

TCS:
Outlook and visibility for double-digit growth: In the first three quarters of the current financial year, the IT major has shown double-digit growth in the revenues. However, in Q4, it is expected to clock higher single-digit growth as it is seasonally weak quarter compared with 3Q. Most pockets for TCS are doing well, with the exception of Automotives and Hi-Tech.

Outlook, in the build-up to the global slowdown, is an interesting thing to watch for the company.

Commentary on BFSI:Banking and Financial Services Institution (BFSI) – a key vertical for all the Indian tier 1 IT companies, turnaround drove TCS’ robust start to FY19. Its vertical growth accelerated by 4.1% year on year Y-on-Y during Q1 of FY19 – propelling the IT major back to the double-digit growth.

Trajectoryof margins: Despite 1.3% Quarter on Quarter (Q-on-Q) appreciation of the INR, EBIT margin estimate of 25.8% is 20 basis points higher Q-on-Q as pressure from escalated sub-contractors has abated for TCS.

DH brings to you key things to look out for in each company’s results:

Infosys:

Guidance on revenues and margins:Infosys witnessed it operating margin level reaching to a 10-quarter low in the quarter ended December 2018. It would be interesting to note how Infy sees at their margins going forward in the current financial year. Advisories expect the company to guide for 7-9% CC revenues for FY20 and 21-23% EBIT margin band (100bp lower).

Deal wins:Past few quarters have been very strong for Infosys in terms of deal wins – with the company achieving $2 billion quarterly deal wins in the second quarter and $1 billion deal wins in the first quarter. It would be interesting to see what the company has in store in terms of deal wins.

Attrition level:Attrition has been a major issue with Infosys. After reaching an alarming level of around 21% in the second quarter of the by-gone financial year, it was able to pull it back in lieu of better employee incentives. But given that, historically, we have seen higher attrition rates in the 4th quarter, we might end up seeing higher attrition in the quarter again.

Analysts expect Infosys' fourth quarter to be better than the third quarter.

Due to a ramp-up in a large Communications deal, analysts expect Infosys' fourth quarter to be better than the third quarter. The analysts from Motilal Oswal estimates 2.3%QoQ and 12% YoY.

Infosys' revenue growth estimate is 2.6%, with 30bp tailwind from cross currencies QoQ.

Infy's net profit is estimate to be around Rs 4,010 crore, 0.7% QoQ and 8.8% YoY.

Markets expect INFO EBIT margin to correct by 60bp QoQ to 22.4%, in line with its outlook of back-ended investments weighing on its profitability.

Markets expect TCS to grow its constant currency revenues by 2% QoQ

Markets expect TCS to grow its constant currency revenues by 2% QoQ (12.1% YoY). 4QFY19 is a seasonally weak quarter compared to 3Q. Most pockets for TCS are doing well, with the exception of Automotives and Hi-Tech.

Despite 1.3% QoQ appreciation of the INR, EBIT margin estimate of 25.8% is 20bps higher QoQ as pressure from escalated sub-contractors has abated for TCS.

Net Profit of TCS is estimated to be at Rs 7,840 crore, lower QoQ by 3% due to lower total other income.

Market Advisory Motilal Oswal expects USD revenue growth of 2.7% QoQ for TCS, on the back of 70bp tailwind from currencies.

Infosys Board on Friday recommended a final dividend of Rs 10.50/- per equity share for the financial year ended March 31, 2019.

Infosys on Friday reported Rs 4,078 crore consolidated net profit for the fourth quarter ended March 31, 2019 compared to Rs 3,690 crore in the corresponding quarter last year, showing a growth of 10.5%.

Infosys on Friday reported a consolidated revenue of Rs 21,539 crore for the fourth quarter ended March 31, 2019 compared to Rs 18,083 crore in the year ago quarter, a growth of 19.11%.

The Board of directors of Infosys on Friday recommended a final dividend of Rs 10.50 per share ($0.15 per ADR*). After including the interim dividend of Rs 7 per share, the total dividend for Financial Year 2019 will amount to Rs 17.50 per share.

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Watch Live: Infosys Q4 FY19 Results