TCS Q1 results preview: Margin to take a hit; BFSI demand key monitorable

Tata Consultancy Services (TCS) is slated to announce its financial results for the first quarter (April-June) of the fiscal year 2019-20 (Q1FY20) on Tuesday. While the IT firm is likely to fare better than its peers, it is likely to take a hit on the margin front owing to wage hikes, high attrition, visa costs, and a strong rupee.

Additionally, weaker global macro-economic prints, US-China trade tensions, uncertainties around Brexit and moderation in BFSI (Banking, financial services, and insurance) spends are expected to hamper the growth prospects of the overall IT sector, including TCS, analysts say.

Moreover, the double-whammy of an increase in the minimum public shareholding to 35 per cent and a proposal to levy a 20 per cent tax on share buybacks are likely to have a bearing on the IT companies, going ahead.