TCS - A very strange case for investing!


That’s sounds good. I was hoping to do it online. If someone is using HDFC please share the process how to do it.

Edit : Called HDFC helpline and found out that they will start showing the option from tomorrow on the demay account. Customer care advised that I can put an order by navigating to OFS menu option after 10 AM.

(Abhishek Basumallick) #22

Highlights of the Q2 concall:
OPM improved by 170 basis points q-o-q, driven by 50 bps gain on account of favourable Forex and 120 bps savings in operating cost and SG&A efficiencies.
Strong, broadbased client metrics this quarter demonstrates increasing success with newer customers.
Large deal wins this quarter, a good pipeline, and bottoming out of the Retail sector softness positions it well.

TCS continues to gain share in the fast growing Digital spend of customers, evident in its industry-leading Digital growth in Q2.
Digital business grew 5.9% qoq, accounting for 19.7% of revenue. The traction on TTM basis at 26% is at par with previous year’s growth rate.
TCS is confident of sustaining the momentum as it has the largest Digital workforce of 2 lakh+ and broad set of competencies.
The fear of ‘Fintech’ has receded among BFS clients. BFS clients have completed one wave of digital investments and are evaluating digital investment options for the journey ahead.

Except Retail and CMI, all industry verticals grew above the company average, led by Travel & Hospitality (up 8% qoq), Energy & Utilities (up 7.2% qoq) and Life Sciences & Healthcare (up 3.6% qoq).
On a y-o-y basis, all industry verticals – with the exception of BFSI and Retail – grew above 9.5%.
The reorganized service lines successfully completed their transition in Q2, and are experiencing strong demand in their respective domains.
Geographically, growth was led by Europe which grew 5.3% qoq, Latin America (up 5.7% qoq), APAC (up 3% qoq) and UK (up 2.5% qoq).
North America grew 1.4% qoq with continued softness in Banking and Retail.
Newly launched strategic offerings which combine consulting and multiple service lines saw more than 10 major wins in Q2 across Enterprise Agility, M&A, Global Shared Services, Supply Chain and Front Office Customer Experience Transformations.

The company is close to announcing a $50 million kind of deal in the IoT space. It is getting into deals that are substantial.

It maintained operating margin forecast for financial year 2018. It expects OPM in the range of 26-28% for FY 2018.

TCS won 11 large deals, including 5 in North America, 3 in APAC, 2 in Continental Europe and 1 in the UK.
TCS added 1 client in USD 100 million categories, 6 clients each in USD 50 million, USD 20 million and USD 10 million bands and 28 clients in USD 1 million categories
Total employee strength at the end of Q2 stood at 389,213 on a consolidated basis, with gross addition of 15,868 employees and net addition of 3,404 employees during the quarter.

The company continues to enjoy best in class employee retention rates. The IT attrition rate (LTM) fell by 0.3% in Q2 to 11.3%, while the total attrition rate (including BPS) fell to 12.1%.

Cash from Operations stood at Rs 5,809 crore. It was 90.1% of Net Income
Travel & Hospitality grew by 8% qoq QoQ, Energy & Utilities rose 7.2% qoq and Life Sciences was up 3.6% qoq.

(aashish2137) #23

Could this trigger revival for IT outsourcing?

(Julian) #24

What wise men do in the beginning, fools do in the end. Buyback is normally done, when the share prices are low, not when they are at all time highs.

(Vivek Gautam) #25

Surprised to see not much interest in Indias largest market cap co which has given huge returns over the last year .

Any views on its prospects and vuyback which is closing on 21 September 2018.

(Vivek Gautam) #26

Tata Consultancy, Infosys set to gain from wilting Indian rupee

The slump in the currency to boost export earnings of software firms

September 14, 2018 21:29 JST

Top Indian outsourcing companies such as Tata Consultancy Services that doeson’t have meaningful cash flow hedges are likely to benefit immediately from the rupee depreciation. © AP

MUMBAI (NewsRise) – The Indian rupee’s slide against the U.S. dollar since the beginning of the year may provide a boost to India’s software exporters such as Tata Consultancy Services and Infosys after a bleak period of growth slowdown.

The rupee has lost as much as 14% since January, hurt by rising crude oil price and a sell-off in emerging markets, turning the currency into Asia’s worst-performing currency. It touched a record low of 72.92 rupees to a dollar on Wednesday, before rebounding on Friday, amid hopes of government intervention through fiscal and monetary steps.

The slump in the rupee has prompted many analysts to upgrade their earnings estimates for the sector, even as they expect the impact to vary across companies based on their hedging strategies.

Kotak Institutional Equities revised its earnings targets for fiscal years 2019 through 2021 by up to 7%. It assumes the value of rupee to be between 70 and 72, compared with its previous assumption of 68.50 and 70.

According to the brokerage, top Indian outsourcing companies such as Tata Consultancy and Infosys that don’t have meaningful cash flow hedges are likely to benefit immediately from the rupee depreciation. However, for third-largest Wipro, with massive currency hedges, the gains may be limited.

For top Indian outsourcing companies, a 1% fall in the value of rupee against the dollar is likely to lead to a 1% to 1.5% improvement in earnings.

According to Kotak, Infosys’ cash flow hedges are a “miniscule” $300 million. While TCS hedges a large chunk of its cash flows, it does it through options, which means the software exporter is most likely to realize the benefit of the weaker rupee.

The currency gains are a boon to India’s software exporters that have been reluctant to make investments in the face of slowing revenue growth in the last few years. The industry is struggling to accelerate the pace of adoption of new internet-based software which requires massive investments. It continues to rely heavily on stock IT services such as application development and business process outsourcing to drive growth.

India’s main software trade body, the National Association of Software Services Companies, expects the country’s software exports to grow 7% to 9% this fiscal year, a far cry from the double-digit growth in the heady days of last decade.

UBS expects Infosys, along with Tata Consultancy, to use the gains in currency depreciation to accelerate investments.

Infosys and TCS stand out from their competitors in terms of the willingness to invest more in client-facing activities and employee reskilling, UBS said in a note last week. “We view (this) positively when compared to companies that are trying to improve or retain operating margins in fiscal year 2020.”

Shares of Tata Consultancy gained 1%, while that of Infosys lost 1% in Mumbai trading on Friday. Wipro shares gained 0.5%, while the benchmark S&P BSE Sensex closed 1% up.