Tata Consultancy Services Ltd - Q3FY11 Result Update
India's largest software company Tata Consultancy Services (TCS) Revenue at INR 96 bn; up 26% YoY & 4% sequentially, was in line with Unicon estimates. It trumped Infosys Technologies on both revenue and profit fronts in the third quarter of fiscal year 2011.
- (1888PressRelease) January 19, 2011 - Growth across all industries pushes volumes up 5.7% sequentially. Revenue growth was led by mature markets like the US and Europe.
For the quarter under review, TCS saw net profit rising 9.24% quarter on quarter to Rs 2,369.83 crore, while for Infosys, it rose 2.5% to Rs 1,780 crore.
The company's board of director said the business momentum continues to be good. We have seen decent growth across verticals in all geographies.
Expecting the year 2011 to be better than last year, TCS expects client spending to be flat for 2011 with an upward bias. There is also a possibility that pricing could see a little bit of increase going forward. Even though the economic environment continues to be volatile around certain areas, adoption of technology is continuing either because of regulatory reasons, compliance reasons or because of introduction of new products. All these factors will drive TCS's addressable space to higher numbers. With strong hiring plans, the deal pipeline looks to be strong and the outlook remains robust. At CMP the stock trades at 23x its FY12 earnings estimate. Recommend Accumulate with a price target of INR 1270. Chandrasekhar said, if you compare growth on a few parameters like client spends, decision-making, deals happening, deals that have been closed during the year and the ramp ups that are planned we will score better.
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