TCS

TCS posted a very disappointing set of numbers for Q4FY17. Hit by a stronger rupee and retail/banking segments showing some pressure, the most-awaited numbers of Indian IT sector was truly lackluster and very muted.

The consolidated net profit for the quarter fell 2.5% (QoQ) at Rs.6608 crore and this decline began right at the top where revenue dropped 0.3% to Rs.29.642 crore.

Dollar revenue rose 1.5% at $4452 million. The company stated that it lost 1.3% in revenue and 40 bps of the margin during Q4 on account of currency fluctuations. EBIT was down 1.4% at Rs.7627 crore and EBIT margin declined 27 bps to 25.73%.

BFSI (banking, financial services & insurance) poor show is what dented the overall growth. It reported a 1.6% drop in topline and retail & consumer business too added to the woes – its revenue declined 3%. The company blamed the poor performance of BFSI on cyclical factors as Q4 is usually low.

In terms of other segments – Manufacturing rose 1.7%, telecom rose 7.4%, Hi-Tech rose 5.2%, Travel was up 3.6%, Energy by 1.4% and Life Sciences & Healthcare was up 3.1%.

In terms of geographical breakup, revenue from North America fell 1.8% while UK rose 4.1%. Continental Europe did well with a growth of 7.1% while Latin America fell 7.3% and India put up the best show, up 9.3%.

Despite this muted show and oncoming storm of H1B in USA and now Australia too getting stricter on visa rules for working immigrants; the company has maintained an operating margin forecast of 26-28% for FY18 .