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In our results review dated Oct 20, 2014, we recommended investors to buy TCS at the then CMP of Rs. 2423.4 and add on dips to 2266-2329 for a price target of Rs.
2643. Thereafter the stock met our price target on Nov 03, 2014 and subsequently touched a high of Rs. 2709 on Dec 02, 2014. Currently it is quoting at Rs. 2514.
TCS recently reported its Q3FY15 results, which were marginally below our estimates on the revenue front, but profit growth was in line. We present an update on the
stock.
Key highlights of Q3FY15 results: (IFRS)
Consolidated net revenues for the quarter increased by 15.1% Y-o-Y and by 2.9% Q-o-Q to Rs. 245 bn. USD revenues increased by 0.1% Q-o-Q at USD 3931 mn,
impacted by cross currency headwinds, softness in insurance & retail verticals and weak growth in UK due to softness in revenues from Diligenta (BPO subsidiary arm
in UK). Growth in constant currency (CC) stood at 2.5% Q-o-Q. Volume growth was weak at 0.4% Q-o-Q on account of seasonality & furloughs, while realizations (in CC)
improved by 2.3% Q-o-Q. Offshore shift had negative impact of 0.2% on revenues. Volume growth of TCS was lower than Infosys (4.2% Q-o-Q) for the first time in last
several quarters.
EBITDA margins declined by 261 bps Y-o-Y, but rose marginally by 20 bps Q-o-Q to 28.8%. EBIT margins declined by 271 bps Y-o-Y, but improved by 19 bps Q-o-Q to
27%. Sequential margin expansion was aided by rupee depreciation (positive impact of ~40 bps). However, the company re-invested part of the currency benefits into
sales & marketing spends.
Other income rose 11.9% Y-o-Y & 11.2% Q-o-Q, aided by forex gains of Rs. 2415 mn. However, higher depreciation (up 21.9% Y-o-Y & 3.5% Q-o-Q), higher effective tax
rate (up 2 bps Y-o-Y & 101 bps Q-o-Q) and higher minority interest (up 55.8% Y-o-Y) impacted the PAT, which grew by 5.1% Y-o-Y & 2.9% Q-o-Q. PAT margins fell by
210 bps Y-o-Y, but rose marginally by 2 bps Q-o-Q to 22.2%.
EPS for the quarter stood at Rs. 27.8 vs. Rs. 26.5 in Q3FY14 & Rs. 27 in Q2FY15.
LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010896
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
In our results review dated Oct 20, 2014, we recommended investors to buy TCS at the then CMP of Rs. 2423.4 and add on dips to 2266-2329 for a price target of Rs.
2643. Thereafter the stock met our price target on Nov 03, 2014 and subsequently touched a high of Rs. 2709 on Dec 02, 2014. Currently it is quoting at Rs. 2514.
TCS recently reported its Q3FY15 results, which were marginally below our estimates on the revenue front, but profit growth was in line. We present an update on the
stock.
Key highlights of Q3FY15 results: (IFRS)
Consolidated net revenues for the quarter increased by 15.1% Y-o-Y and by 2.9% Q-o-Q to Rs. 245 bn. USD revenues increased by 0.1% Q-o-Q at USD 3931 mn,
impacted by cross currency headwinds, softness in insurance & retail verticals and weak growth in UK due to softness in revenues from Diligenta (BPO subsidiary arm
in UK). Growth in constant currency (CC) stood at 2.5% Q-o-Q. Volume growth was weak at 0.4% Q-o-Q on account of seasonality & furloughs, while realizations (in CC)
improved by 2.3% Q-o-Q. Offshore shift had negative impact of 0.2% on revenues. Volume growth of TCS was lower than Infosys (4.2% Q-o-Q) for the first time in last
several quarters.
EBITDA margins declined by 261 bps Y-o-Y, but rose marginally by 20 bps Q-o-Q to 28.8%. EBIT margins declined by 271 bps Y-o-Y, but improved by 19 bps Q-o-Q to
27%. Sequential margin expansion was aided by rupee depreciation (positive impact of ~40 bps). However, the company re-invested part of the currency benefits into
sales & marketing spends.
Other income rose 11.9% Y-o-Y & 11.2% Q-o-Q, aided by forex gains of Rs. 2415 mn. However, higher depreciation (up 21.9% Y-o-Y & 3.5% Q-o-Q), higher effective tax
rate (up 2 bps Y-o-Y & 101 bps Q-o-Q) and higher minority interest (up 55.8% Y-o-Y) impacted the PAT, which grew by 5.1% Y-o-Y & 2.9% Q-o-Q. PAT margins fell by
210 bps Y-o-Y, but rose marginally by 2 bps Q-o-Q to 22.2%.
EPS for the quarter stood at Rs. 27.8 vs. Rs. 26.5 in Q3FY14 & Rs. 27 in Q2FY15.
LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010896
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