Tata Consultancy Services Ltd. (TCS) | Q3FY15 Result Update | Missed the street expectation; Robust FY16 Outlook: Maintain HOLD | TP Rs.2,666. :: IndiaNivesh

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Tata Consultancy Services Ltd (TCS) Q3FY15 performance was below our
expectations on all front. USD revenues grew by 0.1% Q/Q to $3,931 mn (INSPL
est: US$3,975mn). The revenue growth is well below the street expectation range
of 0.8-1.5% Q/Q. This was primarily due to less than expected project ramp-up in
Energy segment and cross currency impact. Rupee revenue increased 2.5% Q/Q
to Rs.239bn (INSPL est. Rs247bn) driven by 0.4%/2.1 Q/Q volume and pricing
growth. EBIT margin expanded 19bps Q/Q to 27.0% due to currency (+40 bps),
SG&A (+19 bps) and others (-27 bps). Net profit grew by 0.6% Q/Q to Rs54.4bn
(INSPL est: Rs55.5bn) with margin of 22.2% (contracted 51bps Q/Q). During the
quarter, TCS reported the forex gain of Rs.2,415 mn (v/s Rs. 1,644 mn in Q2FY15).
Management expect FY16 to be a much stronger year relative to FY15 on back of
improved demand environment, strong deal pipeline and huge traction in digital,
retail, health, governance and risk management space.

LINK
http://www.indianivesh.in/Admin/Upload/635572713817635000_TCS_Q3FY15%20Result%20Update.pdf