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Tata Consultancy Services (TCS): A Strong Performance - Views on News from Equitymaster
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  • Jan 13, 2017 - Tata Consultancy Services (TCS): A Strong Performance

Tata Consultancy Services (TCS): A Strong Performance
Jan 13, 2017

India's largest software firm, Tata Consultancy Services (TCS) has announced its financial results for the third quarter of FY17. The company has reported a 1.5% QoQ increase in consolidated sales while the consolidated net profit was up 0.9% QoQ.

Performance Summary
  • Revenues increased by 1.5% QoQ in 3QFY17 in rupee terms. Revenues increased by 2% QoQ in constant currency terms. In US dollar terms, revenues increased by 0.3% QoQ. Volumes were up by 1% QoQ.
  • The operating performance was stable. The operating margin was flat at a healthy level of 27.7% 3QFY17. On an absolute basis, the operating profit increased by 1.4% QoQ.
  • The other income increased by 12.8% QoQ and came in at Rs 11,920 million for the quarter.
  • The net profit for the quarter came in at Rs 68,410 million, up 0.9% QoQ. This is the first time the company has crossed the US$ 1 billion quarterly net profit mark.
  • The management has declared an interim dividend of Rs 6.5 per share. The record date and payment date for the same are 24th January and 1st February, respectively.
  • In a widely expected development, Natarajan Chandrasekaran, CEO and Managing Director of TCS, was appointed the next chairman of Tata Sons, the holding company of the Tata Group. He will move to the new role on 21st February. On the same day, company veteran Rajesh Gopinathan will take over as the CEO and MD of the company and N. G. Subramanian will take over as president and chief operating officer.

    Consolidated Financial Snapshot
    (Rs m) 2QFY17 3QFY17 Change 9MFY16 9MFY17 Change
    Sales 292,840 297,350 1.5% 801,970 883,240 10.1%
    Expenditure 211,710 215,060 1.6% 574,270 641,450 11.7%
    Operating profit (EBITDA) 81,130 82,290 1.4% 227,700 241,790 6.2%
    Operating profit margin (%) 27.7% 27.7% 28.4% 27.4%
    Other income 10,570 11,920 12.8% 21,690 32,240 48.6%
    Finance Costs 50 70 40.0% 230 240 4.3%
    Depreciation 4,960 4,960 0.0% 13,930 14,820 6.4%
    Profit before tax 86,690 89,180 2.9% 235,230 258,970 10.1%
    Tax 20,660 21,040 1.8% 55,320 61,620 11.4%
    Minority Interest 310 40 -87.1% 930 510 -45.2%
    Other comprehensive income 2,090 310 -85.2% 1,240 4,350 250.8%
    Profit after tax/(loss) 67,810 68,410 0.9% 180,220 201,190 11.6%
    Net profit margin (%) 23.2% 23.0% 22.5% 22.8%
    No. of shares 1,970.4
    Diluted earnings per share (Rs)* 135.0
    P/E ratio (x)* 16.8
    *On a trailing 12 months basis
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Oct 19, 2017 07:33 PM

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