TCS

The company has once again beaten expectations and one wonders why the management had gone all bearish just a few days before the end of FY14.  But sequentially, the numbers are just about good though YoY (lower base effect), the numbers look bumper. YoY, net profit at Rs. 5297 crore rose 51%  and revenue rose 31% at Rs.21,551 crore. Sequentially, it was up 0.5%, which is almost flat and 1.2% respectively. EBITDA, YoY rose 43% at Rs.6653 crore but QoQ, it fell 0.5%. EBITDA margin, which is the highest in the industry in India, fell 45 bps to 29.3%.

In terms of geographical growth, sequentially, North America was flat at 52.2%, Latin America fell 2.3%, UK rose 2.6%, while rest of Europe showed the biggest rise amongst all at 5%. India remained flat at 0.3% Asia Pacific grew 2.4% and the only region to show a drop was Middle East and Africa, down 2.8%. Thus the total geographical growth during Q4 was 1.2%. In terms of verticals, Media and Entertainment , which contributes less than 3% to the revenue rose 13%, while the biggest contributor, BFSI at 43%, rose 1.7%. Degrowth was seen in telecom and manufacturing. For FY15, the company has stated that BFSI will continue to lead followed by retail, lifeSciences and hi-tech. In terms of overall volume growth, it was 3% (QoQ).

Attrition rate was at 11.3%, up from 10.9% in Q3. The total employee strength of the company stood at 300,464 professionals. In Q4, the gross employee additions were 18,564 and net employee additions were 9,751 professionals. For current fiscal, the company is looking at a gross addition of 55,000 employees that includes 25,000 campus hires. Like Infosys, TCS is also hiking wages but more than the former - average increment will be 10% with high performers eligible for 14% and above. This is sure to impact margins in Q1FY15. Utilisation rate, including trainees is at 77.9%.

The company had ended FY14 with a consolidated net profit at Rs.19.164 crore, up 38% on a 30% rise in revenue at Rs.81,809 crore. It has declared a final dividend of Rs 20/share. Cash balance is hefty at Rs.14,442 crore, more than double from Rs.6769 crore at end of FY13.