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1QFY2012 Result Review
TCS
TCS reported strong set of 1QFY2012 numbers, outperforming our as well as street
expectations. The company reported revenue of US$2,412mn, up 7.5% qoq, on the back
of robust volume growth of 7.4% qoq. In rupee terms, revenue came in at `10,797cr, up
6.3% qoq. EBIT margin declined by 214bp qoq to 26.2% due to wage hikes given in
1QFY2012, effective from April 1, 2011 (12–14% for offshore employees and 2–4% for
onsite employees). PAT came in at `2,380cr, almost flat qoq despite margin headwinds on
the back of higher other income of `289cr as against `224cr in 4QFY2012.
The company closed 10 large deals in 1QFY2012. Management indicated that it plans to
hire 17,000–20,000 employees in 2QFY2012 as it is witnessing a strong deal pipeline.
The company remains our top pick amongst tier-I IT companies because of its diversified
portfolio on all fronts service wise, industry exposure wise as well as geography wise.
We maintain our Buy rating on the stock. The target price is currently under review
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