Tata Infotech: Slips into red - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Tata Infotech: Slips into red

Jul 29, 2002

Tata Infotech has posted a loss of Rs 11 m for 1QFY03. This is due a steep fall in revenues during the quarter. On a sequential (QoQ) basis the company’s revenues have declined by 16%.

(Rs m)4QFY021QFY03Change
Sales 1,146 958 -16.4%
Other Income 29 21 -26.2%
Expenditure 1,114 986 -11.5%
Operating Profit (EBDIT) 32 (28)-188.6%
Operating Profit Margin (%)2.8%-2.9% 
Interest 2 4 81.8%
Depreciation 39 36 -7.8%
Profit before Tax 19 (46)-337.9%
Tax (50) (35)-29.4%
Profit after Tax/(Loss) 69 (11)-116.3%
Net profit margin (%)6.0%-1.2% 
Diluted number of shares (m) 18.4 18.4  
Diluted Earnings per share* 15.1 (2.5) 
P/E (at current price)  -  
*(annualised)   

The numbers look equally disappointing when compared on a YoY basis. The topline has declined by 27%. The company in 1QFY02 had posted a net profit figure of Rs 54 m. Tata Infotech slipped into the red, as it could not cut its costs in line with the fall in revenues. The most inflexible cost head was employee costs that declined by only 7%. However, the company did manage to cut overseas business, raw material and other costs significantly.

Of the total revenues, 10% came from the manufacturing and 5% from education. The lion’s share came from the company’s systems integration business that is witnessing a slowdown. On a QoQ basis, revenues from the company’s systems integration business declined by 14%. At a time when other Indian software companies have managed to improve performance, Tata Infotech’s performance has deteriorated. Infact, in the last quarter 4QFY02, the company had posted a strong 12% sequential growth in revenues.

At the current market price of Rs 190, the stock trades at a P/E multiple of 15x its FY03 estimated earnings. Considering the disappointing performance the stock price is likely to head south going forward.

Equitymaster requests your view! Post a comment on "Tata Infotech: Slips into red". Click here!

  

More Views on News

Birlasoft Hits 52-week High as Company Signs AI Partnership (Views On News)

Jun 9, 2021

The stock has rallied 350% in the last year. Is there more steam left?

What's Behind the Rally in Wipro Shares? (Views On News)

May 31, 2021

Wipro shares outperforms TCS and Infosys over the past year. Is the rally justified?

Happiest Minds Q4 Results: Profit Grows Over Six-Fold; Company Eyes 20% Organic Growth in FY22 (Views On News)

May 14, 2021

Key takeaways from Happiest Minds Technologies Q4FY21 results.

L&T Technology Shares Fall After Q4 Results. What Should Investors Do? (Views On News)

May 5, 2021

Despite strong deal wins and a low base in FY21, a big turn-off for investors was the muted FY22 revenue growth guidance.

Tech Mahindra Shares Fall After Q4 Results. What Should Investors Do? (Views On News)

Apr 27, 2021

Tech Mahindra forecasts double digit growth driven by strong demand from clients.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

Don't Break These 5 Intraday Trading Rules (Fast Profits Daily)

Jun 1, 2021

To become a better intraday trader, follow these rules religiously.

Is the RBI's 'Bubble Talk' Signalling a Market Crash? (Profit Hunter)

May 31, 2021

Is the Indian central bank correct in warning you about a market crash?

Rs 2 Trillion Stimulus Coming to a Stock Market Near You (Profit Hunter)

Jun 2, 2021

Get ready to profit from a massive stimulus that you've never seen before.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

TRACK TATA INFOTECH

  • Track your investment in TATA INFOTECH with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

MARKET STATS