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Ride the momentum…
Standing tall
• Largest Indian IT company both in terms of revenues (|37,325
crore) and employee base (~200,000)
• Revenue and net profit have grown at a CAGR of 25.3% & 26.3%
during FY04-FY11 period
• Clients in core verticals such as banking financial services &
insurance (44% of FY11 revenues) and retail & distribution (11%)
continue to spend
• Demand environment and qualified deal pipeline continues to be
robust as reflected from the initial FY12E employee hiring
guidance of 60,000
• Non-linear initiative such as iON (cloud based solution for small &
medium business), platform BPO and financial products could
help sustain revenue growth momentum & operating margins
• At 83%, including trainees utilisation continues to be in the
comfort zone
• TCS appears cohesive, aggressive & reinvigorate unit the current
CEO N Chandra who is just 48 years old while official retirement
age at TCS is 65 years, which implies minimal churn/stable
management at the top
Going ahead
• Expect industry leading US$ revenue growth during FY12E-FY14E
period helped in part by volume growth, non-linear initiatives &
scale benefits.
• Pricing improvement led by portfolio shift could help offset wage
inflation
• TCS continues to operate at industry leading ROE’s and ROCE’s
Valuation
Demand environment continues to be robust led by discretionary
spending across verticals and service lines. TCS was the key beneficiary
of market and mind share gain post FY09 and continues to outperform its
peers driven by scale and efficiency.
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