INSUBCONTINENT EXCLUSIVE:
NEW DELHI: TCS' strong deal wins and sustained digital growth impressed analysts in a seasonally weak quarter, but sequential weakening of
margins due to higher subcontracting cost remains a worry, say analysts.
This has prompted them to reduce their earnings forecast for
firm.
The 26-28 per cent margin band will be elusive for a while, they said, adding that a likely slowdown in US could bite revenue growth,
The IT giant on Thursday reported a 24.1 per cent growth in YoY profit at Rs 8,105 crore for October-December, largely in line with ET NOW
poll estimate of Rs 8,150 crore
Revenue for quarter rose 20.80 per cent YoY to Rs 37,338 crore
Margins for quarter under review fell 90 basis points to 25.60 per cent on a sequential basis.
Edelweiss Securities attributed higher
subcontracting cost to strong demand for digital work, for which talent is in short supply.
The trend of supply shortage was even mentioned
Motilal Oswal Securities said in a note.
Nirmal Bang Institutional Research believes that this could be an attempt by TCS to hoard talent as
multi-year high at 7.6 per cent of sales
TCS also hired aggressively in YTD FY19 at 27,000 net hires versus just 7,000 in YTD FY18
1,545.
Book-to-bill ratio for IT major improved to 1.12 times in December quarter, from 0.95 time average of first and second quarter, said
2,430.
TCS is perhaps one of two global leaders with a broad range of capabilities, strong digital competencies, ability to structure and
execute large multi-year, multi-service deals offered on an outcome basis, strong platform bets and most importantly, consistency in
corrected by 20 per cent from highs of three months ago, though not enough to warrant a rerating
