Views on TCS 1QFY2016 Results: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - IT, Angel Broking) on TCS 1QFY2016 Results:

"TCS announced its 1QFY2016 results, which was lower than expectations on the sales and net profit front. The company has posted a 3.5% qoq growth to end the period US$4,036mn V/s US$4,056mn expected. The volume growth during the period was strong 4.8% qoq. Strong growth in BFS, Retail, Life Sciences and Telecom; North America & UK, in terms of verticals and regions respectively were the drivers.

In rupee terms, revenues came in at INR 25,668cr V/s INR 25,784cr, up 6.0% qoq. EBITDA margins came in at 28.1% V/s 28.5% expected a qoq dip of 110bps. The margins were cushioned by the higher utilization, which came in at 82.9% in 1QFY2016 V/s 81.5% in 4QFY2015. On the flip side, the attrition, rose marginally to 15.1% V/s 14.9% in 4QFY2015.Consequently, Adj. PAT came in at INR 5,709cr V/s INR 5,950cr expected, a dip of 3.3% qoq.

On the order inflows, the clients addition in the $ 100M+ revenue band increased by 1, in $ 50M+ revenue band by 1 and in $ 20M+ revenue band by 10. We maintain our BUY rating on the stock with a target price of INR 3,168."

Shares of TATA CONSULTANCY SERVICES LTD. was last trading in BSE at Rs.2471.9 as compared to the previous close of Rs. 2521.4. The total number of shares traded during the day was 303348 in over 23576 trades.

The stock hit an intraday high of Rs. 2562 and intraday low of 2455. The net turnover during the day was Rs. 755047873.

Source : Equity Bulls

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