Visit http://indiaer.blogspot.com/ for complete details �� ��
Tata Consultancy Services
TCS was represented by Mr. S. Mahalingam (CFO), and Mr. Kedar Shirali
(Director of Investor Relations).
Demand outlook: TCS continues to remain upbeat on the demand outlook
and expects client budgets to remain favourable in 2011 as well.
Management cited increased client willingness to spend on IT as the reason
for the bullish outlook. The company continues to see a revival in
discretionary spending in the Banking, Financial Services and Insurance
(BSFI) segment, while telecommunication service providers and equipment
manufacturers are also showing signs of recovery. Retail has also seen an
increase in spending on offshore services, and is among the fast growing
verticals for the company.
Supply concerns: TCS believes that one of the reasons for its
outperformance in revenue growth is the effort that has gone into ensuring
employee satisfaction, especially at the senior level. Management is
comfortable at current levels of utilisation (77.7% in Q2 FY11) and believes
that its policy of higher variable payouts will be adequate to contain attrition
(14.1% in Q2 FY11).
28.4% in Q2 FY11 and 27.3% in FY10. While this builds in a sufficient
cushion for currency appreciation and a utilisation drop in H2 FY11,
investors remain concerned on the lack of adequate hedges (about US$500m
covering receivables only), which could impact both revenue and margins for
the company.
UBS view: We expect TCS to continue to report faster growth than its peers due
to its strong growth in the financial services sector, as well as the benefits
accruing from its investments in sales & marketing and recruitment over the past
24-36 months. TCS remains the top pick in our coverage universe.
No comments:
Post a Comment