Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L o f t y e x p e c t a t i o n s p i e r c e e a r n i n g s …
TCS reported its Q2FY12 numbers, which were ahead of our but
marginally below consensus estimates. Sequential rupee revenue growth
of 7.7% was aided by international revenues (grew 9% QoQ) while India
revenues created a drag (declined 4.3%). QoQ growth by market was
broad based with the US, UK and Continental Europe growing 8.8%,
10.3% and 9.3%, respectively. Price realisations continue to be a
headwind and impacted Q2 and Q1FY12 revenues by 95 and 50 bps,
respectively. Noticeably, TCS expects seasonal demand pressures in Q3
and Q4 while Infosys expects evenly spread out demand. This disconnect
in the demand outlook for the back half of FY12 makes us cautious and
leads us to maintain our estimates till CY12 IT budget clarity emerges.
ƒ Earning summary
Q2FY12 US$ revenues grew 4.7% QoQ (4.4% estimate) to $2.53
billion while those in rupees grew 7.7% QoQ (6.8% estimate) to |
11,633 crore. Rupee revenue growth was aided by volume growth
(up 6.25%) and currency (up 2.5%) while rate realisations (-0.95%)
and offshore effort shift (-5 bps) created drag. At 27.1%, EBIT
margins were in line with our 27.1% estimate while reported PAT of
| 2,439 crore was marginally above our | 2,408 crore estimate.
ƒ Vertical growth trends
Banking, financial services & insurance (43.5% of revenues) grew
8.6% QoQ vs. 5.8% in Q1 while retail (12.1%) grew 12.2% QoQ vs.
11.3% in Q1. Manufacturing, hi-tech & life sciences continue to
witness robust demand with 10.3%, 9.5%, & 9.1% growth,
respectively. Energy & utilities contribution increased 0.5 percentage
points (pp) QoQ & grew 20% QoQ. Telecom came in the weakest
with 1 pp decline in contribution & 1.7% QoQ decline in revenues.
V a l u a t i o n
We expect US$ revenues to grow by 21%/14% in FY12E/FY13E and
rupee revenue/EPS to grow by 20%/18% and 13%/10%, respectively.
This translates to revenue/earnings CAGR of 19%/18% over FY10-FY13E.
Finally, we have valued TCS at | 1150, i.e. at 20x our FY13E EPS estimate
of | 57.4 and maintain our BUY rating.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L o f t y e x p e c t a t i o n s p i e r c e e a r n i n g s …
TCS reported its Q2FY12 numbers, which were ahead of our but
marginally below consensus estimates. Sequential rupee revenue growth
of 7.7% was aided by international revenues (grew 9% QoQ) while India
revenues created a drag (declined 4.3%). QoQ growth by market was
broad based with the US, UK and Continental Europe growing 8.8%,
10.3% and 9.3%, respectively. Price realisations continue to be a
headwind and impacted Q2 and Q1FY12 revenues by 95 and 50 bps,
respectively. Noticeably, TCS expects seasonal demand pressures in Q3
and Q4 while Infosys expects evenly spread out demand. This disconnect
in the demand outlook for the back half of FY12 makes us cautious and
leads us to maintain our estimates till CY12 IT budget clarity emerges.
ƒ Earning summary
Q2FY12 US$ revenues grew 4.7% QoQ (4.4% estimate) to $2.53
billion while those in rupees grew 7.7% QoQ (6.8% estimate) to |
11,633 crore. Rupee revenue growth was aided by volume growth
(up 6.25%) and currency (up 2.5%) while rate realisations (-0.95%)
and offshore effort shift (-5 bps) created drag. At 27.1%, EBIT
margins were in line with our 27.1% estimate while reported PAT of
| 2,439 crore was marginally above our | 2,408 crore estimate.
ƒ Vertical growth trends
Banking, financial services & insurance (43.5% of revenues) grew
8.6% QoQ vs. 5.8% in Q1 while retail (12.1%) grew 12.2% QoQ vs.
11.3% in Q1. Manufacturing, hi-tech & life sciences continue to
witness robust demand with 10.3%, 9.5%, & 9.1% growth,
respectively. Energy & utilities contribution increased 0.5 percentage
points (pp) QoQ & grew 20% QoQ. Telecom came in the weakest
with 1 pp decline in contribution & 1.7% QoQ decline in revenues.
V a l u a t i o n
We expect US$ revenues to grow by 21%/14% in FY12E/FY13E and
rupee revenue/EPS to grow by 20%/18% and 13%/10%, respectively.
This translates to revenue/earnings CAGR of 19%/18% over FY10-FY13E.
Finally, we have valued TCS at | 1150, i.e. at 20x our FY13E EPS estimate
of | 57.4 and maintain our BUY rating.
No comments:
Post a Comment