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Tata Consultancy Services ( TCS ) : Today TCS announced its Q3 FY 2008- 2009 results. It recorded a 4.7% q-o-q growth in Top-line in 3QFY2009 primarily driven by the significant Rupee depreciation witnessed over the quarter (positive impact of 3.4% q-o-q). The company's net profit was up 7.17% and came in at Rs 1,352 crore versus 1261.5 crore and its revenues were up 4.65% at Rs 7,277 crore versus Rs 6,953.4 crore.The TCS management in a press conference said that growth in Q3 revenue was impacted by the rupee movement. However, in US Dollar terms, revenues dipped 5.8% q-o-q largely on account of the adverse cross-currency fluctuations witnessed over the quarter, with the British Pound, Euro, Australian Dollar and Brazilian Real all depreciating against the US dollar.
The rupee rate for TCS came in at Rs49.07 per dollar in 3QFY2009 as against Rs44.18 in 2QFY2009, higher by 11.1% q-o-q. Volumes grew by a subdued 2.4% q-o-q, reflecting the increasing pressures of the worsening business environment.
Factors that adversely impacted revenue growth during the quarter were a slight dip in pricing (0.1% q-o-q) and a shift in the effort mix to offshore (1.1% q-o-q). Offshore revenues grew, as a percentage of Sales, by 0.8%.
The management said that it has added 41 new clients and that its attrition rate was at 11.9%. The net added number of employees in Q3 is 8,692, it said. TCS reported that its PAT has gone up by Rs 41.53 crore due to lower depreciation charges. The staff utilisation rate excluding trainees is at 79.9% and the operating margins grew on (QoQ), TCS informed.
Owing to the margin expansion, the company recorded a 7.2% q-o-q rise in Bottom-line in 3QFY2009. Forex losses at Rs251 crore were almost similar to the previous quarter (Rs260 crore). On a y-o-y basis, bottomline grew by a mere 1.6%.
Over FY2008-10E, we expect TCS to record a 15.4% CAGR in topline, while bottomline is expected to clock a mere 6.2% CAGR.
S Ramadorai, CEO and Managing Director of Tata Consultancy Services, is expecting significant reduction in IT budgets from clients. He added that next fiscal would be even more challenging. TCS investors, he said, should look at long-term growth rather than quarterly results. He feels companies will revise guidance downward on poor macro environment.
Ramadorai added that clients are looking to cut costs and increase efficiency levels. He added that clients are not spending and are delaying their decisions and that their discretionary spending is going to be non-existent.
The management added that Nortel bankruptcy filing was surprising. It, however, added it would not be surprised to see few more bankruptcies like Nortel happen. They expect more volatility and see more challenges ahead. Also, they feel there will be more lay-offs in the US.
TCS feels that the Satyam situation is limited to single company and that would not harm the IT industry. The TCS management added that Satyam clients approached them and that no final transformation has been done yet.TCS is clear that they will not service any Satyam client at low price irrespective of volumes.
Broker Comment : Angel Broking - At the CMP, the stock is trading at 8.8x FY2010E EPS. While valuations appear reasonable, given the cautious short-term environment for growth and pricing and the below-par 3QFY2009 performance by TCS, we believe the stock is likely to trade lacklustre in the near-term.
Here we updated Advanced Tax Figure for India Inc for Qtr October - December
Advanced Tax Figure ( declared on 16/10/2008 )
- Tata Motors Oct-Dec advance tax nil vs 59 cr rupees
- L n T Oct-Dec advance tax 312 cr rupees vs 180cr rupees
- M n M Oct-Dec advance tax 4.5 cr rupees vs 60 cr rupees
- TCS Oct-Dec advance tax 129 cr rupees vs 108 cr rupees
- Tata Steel Q3 advance tax 230 cr rupees vs 750 cr rupees
- Ultratech Q3 advance tax 65 cr rupees vs 140 cr rupees
- Bank of Baroda Q3 advance tax 220 cr rupees vs 200 cr rupees
- Indian Hotels Q3 advance tax nil vs 50 cr rupees
- HUL Oct-Dec advance tax 155 cr rupees V/s Rs 110 cr earlier
- ACC Oct-Dec advance tax 180 cr rupees vs 150 cr rupees year ago
- Bajaj Auto Q3 advance tax 105 cr rupees vs 175 cr rupees
- Siemens Oct-Dec advance tax 130 cr rupees vs 130 cr rupees
- Idea Communication Oct-Dec advance tax 8 cr rupees vs nil
- EXIM Bank Oct-Dec advance tax 65 cr rupees
- Asian Paints Oct-Dec advance tax 45 cr rupees
- Lupin Oct-Dec advance tax 15.5 cr rupees vs 45.1 cr rupees
- Kotak Mahindra Bank Oct-Dec advance tax 40 cr rupees
- NABARD Oct-Dec advance tax 220 cr rupees vs 180 cr rupees
- RCF Oct-Dec advance tax 66 cr rupees vs 24 cr rupees
- Ambuja Cements Oct-Dec advance tax 140 cr rupees
- NSE Oct-Dec advance tax 17 cr rupees vs 69 cr rupees
Out of 21 companies who reveled their Adv Tax fig on 16th December 2008, total 8 companies reported a negative tax figure, this shows a slowdown in India Inc . The same figure was captured in FY 2008 - 09, Q2 Earnings report. That also shows a confirm slowdown in Indian Economy and this Advanced Tax figure also reported the same. But before reaching to any final decision we need to get wait and watch all figures of India Inc. In this slowdown , Tata Group get the more shock than any other corporate group. First Corus then Land Rover Jaguar Deal, Singur plant shift ( which cost approx Rs 250 crs to TATA group ) and then Mumbai Terror Attack to Tata Group , TAJ hotel which is a group hotel of Indian Hotels . The complete renovation would cost around Rs 500 - 600 crores , which is only estimated cost and can turn to be more expensive as it is a Heritage Building.
All figures are reported on NW18 , so before taking any action or call please check with the NW18 website.
Earning Updates for quarter II for Financial Year 2008-2009 .
Wipro : This Software major, on consolidated basis, announced a 18.76% rise in profit for the quarter ended September 2008. During the quarter, the profit of the company rose to Rs 9,782 million as compared to Rs 8,237 million for the quarter ended September 2007. Total Income rose 36.47% from Rs 48,836 million for the quarter ended September 2007 to Rs 66,647 million for the quarter ended September 2008.
Bank of India : a leading public sector lender reported a phenomenal rise in its standalone net profit for the quarter ended September 2008. During the quarter, the profit of the company surged 79.38% to Rs 7,628.60 million from Rs 4,252.70 million in the same quarter, last year. Interest earned for the quarter climbed 33.19% to Rs 39,627.70 million, while total income for the quarter rose 31.64% to Rs 46,122.70 million, when compared with the prior year period.
Tata Consultancy Services (TCS) : A leading software company, announced a marginal rise in its standalone net profit for the second quarter ended September 2008. During the quarter, the profit of the company rose 2.26% to Rs 11,730.40 million from Rs 11,471.10 million in the same quarter, previous year. Net sales for the quarter rose 24.54% to Rs 56,999.60 million, while total income for the quarter rose 17.93% to Rs 55,207.90 million, when compared with the prior year period. The company posted earnings of Rs 11.99 a share during the quarter, registering 2.30% growth over previous year period.
Infrastructure Development Finance Company (IDFC) : Reported a steady growth in its standalone net profit for the second quarter ended September 2008. During the quarter, the profit of the company rose 17.27% to Rs 2,104.32 million from Rs 1,794.40 million in the same quarter, last year. The operating income for the quarter rose 39.69% to Rs 8,419.97 million, while total income for the quarter climbed 40.43% to Rs 8,487.80 million, when compared with the prior year period. The company posted earnings of Rs 1.63 a share during the quarter, as against Rs 1.40 a share a year ago, registering 16.43% growth.
Neyveli Lignite Corporation : Announced an 18.46% drop in its standalone net profit for the quarter ended September 2008. During the quarter, the profit of the company declined to Rs 1,883.90 million from Rs 2,310.40 million in the same quarter, last year. Net sales declined marginally 8.19% to Rs 6,682 million, while total income for the quarter fell 7.23% to Rs 8,183.10 million, when compared with the prior year period. The company posted earnings of Rs 1.12 a share during the quarter, registering 19.42% decline over previous year period. During the quarter, the operating margin of the company dropped by 342 basis points to 32.14% compared with the previous year period. Interest cost increased 15.53% to Rs 11.90 million while depreciation cost rose 2.48% to Rs 1,023.50 million over previous year period.
CIPLA : Cipla reported a 20.56% drop in its standalone net profit for the quarter ended September 2008. During the quarter, the profit of the company declined to Rs 1,514.30 million from Rs 1,906.20 million in the same quarter, last year. Net sales for the quarter rose 23.33% to Rs 13,546.90 million, while total income for the quarter rose 20.29% to Rs 13,715.60 million, when compared with the prior year period. The company reported earnings of Rs 1.95 a share during the quarter, registering 20.41% decline over previous year period. During the quarter, the operating margin of the company fell by 481.90 basis points to 15.58% compared with 20.39% in the previous year period. Interest cost increased 2.36 times to Rs 55.90 million while depreciation cost rose 24.00% to Rs 406.10 million over previous year period.
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