TCS - 3QFY13 Result Update - Nirmal Bang

HOLD - 3QFY13 Result Update - Volume Growth Below Estimate, But Margins Impress

- 3QFY13 volume growth stood at 1.25% QoQ (versus our estimate of 3.0%), while reported pricing witnessed a 1.8% rise QoQ, partly due to service line mix and favourable cross currency movement.

- Dollar revenue grew 3.3% QoQ to US$2,948mn (versus our estimate of US$2,938mn). Thus, volume was below estimate although pricing was better than expectations.

- EBIT margin surprised positively at 27.3%, a rise of 51bps QoQ (above our/consensus estimates by 68bps/80bps, respectively) due to better pricing and slight offshore shift.

- However, lower other income due to forex loss and higher tax rate led net profit to grow 1.1% QoQ to Rs35.5bn, compared with a 4.8% QoQ rise in EBIT.

- Nonetheless, it was 1.2%/4.4% above our/consensus estimates, respectively. TCS continues to perform consistently.

Source : Equity Bulls

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