TCS

The company, sequentially reported a set of very flat and disappointing numbers for Q4FY13. QoQ, the company reported a 1.3% rise in consolidated net profit at Rs.3597 crore and YoY, the rise was better at 22%. Revenue increased 2.24% (QoQ) at Rs 16,430 crore. The EBIT margin, which has in recent times become its hallmark, was down 75 bps at 26.5% v/s 27.25% in Q3. Yet, it remains one of the best margins in the sector, that too for a company of the size of TCS. The company has shown a whopping 100% jump in its other income at Rs.442 crore but of this Rs.124 crore came in via forex gains. TCS does not give guidance but the management stated that it expects to beat NASSCOM’s 12-14% growth estimation for the sector. For FY13, the company’s performance was robust - net profit at Rs.13,941 crore, up 31% and revenue up 29% at Rs.62,989 crore. It added 153 new clients in the fiscal and added over 69,000 employees. In current fiscal, it plans to add 45,000 more. Total employee strength is 2,76,196.

In Q4FY13, volume growth was 4% on a sequential basis. Attrition was at 10.6% and utilization excluding trainees was at 82%.Cash at end of FY13 stood at Rs.6769 crore. In terms of segments, BFSI contributes the highest to the revenue at 43% and for the quarter, QoQ, revenue from this sector rose 3.4%. Retail and consumer packaged goods contributes 13% to the topline and it rose 3%. Revenue from telecom, media and entertainment was flat and manufacturing rose 2.35%. TCS too is currently facing the brunt from the market over the new proposed US immigration bill. With US planning to charge $10,000 per new employee in companies which have employed over 50% foreign employees while based in USA, TCS, like Infosys and Wipro will have to bear higher costs. But it is inevitable and given its high employee utilization rate, should be able to continue to deliver better margins.