BANGALORE: When TCS and HCL TechnologiesBSE -0.09 % report results for the final quarter of fiscal 2013 on Wednesday, analysts expect them to post better earnings than their Tier-1 peers — InfosysBSE -1.07 %and WiproBSE 0.38 %.
Helped by strong sales and volume growth, the two information technology companies are expected to report revenue growth of 1.5% to 3% in rupee terms in the March quarter, with TCS hitting the higher end of the band. Work volume growth, an indicator of business growth, is expected to be stable at 2% to 3.5%, helped by improving economic macro-economic environment and demand for outsourcing in the US.
Unlike Infosys, which faced scathing criticism from investors and industry experts after a dismal performance in the fourth quarter, TCS and HCL results are expected to reflect the recovery in technology spending in the US and other markets. But profit margins of TCS are expected to decline over 110 basis points due to a one-time expense incurred in February to settle a seven-year case in the US filed by two former employees.
HCL margins are projected to drop 20 to 40 bps due to the strengthening of the rupee against the US dollar.