Maintain Buy on TCS - Q3 FY2012 Results - First Cut - Microsec Research

Tata Consultancy Services Limited (TCS) announced its Q3 FY2012 (December 2011 Quarter) results on 17 January 2012. The company's results came in line with our estimates.

The company's top line increased 13.5% q-o-q to Rs.13,204 Crores while its bottom line expanded 21.8% sequentially to Rs.2,802 Crores in Q3 FY2012. Apart from top contributor BFSI segment, the revenues growth was fueled by a double digit sequential increase in all the business verticals except telecom. TCS reported a 3.2% sequential increase in business volumes, during the quarter, reflecting that the largest contributor to the rising top line was depreciation of Rs. versus $. In addition, the company reported a 192 bps sequential improvement in EBIDTA margins in Q3 FY2012. Apart from depreciation in Rupee the improvement in margins can be attributed to a sharp decline in attrition levels to 12.8%.

Similar to Infosys' results, among the matured geographies, Europe reported the highest 18.1% sequential growth in top line followed by the US (13.3%) and UK (9.5%). Among the emerging geographies, Latin America reported 18.6% sequential growth followed by Asia Pacific (15.7%) and India (14.8%). With this, TCS reported a growth, spread almost evenly spread across all geographies.

TCS also announced an interim dividend of Rs.3 per share.

We continue to remain positive on the stock and reiterate our BUY rating.for TCS.

The TCS stock closed the day at Rs.1104.30, down by Rs.3.05 or 0.28%. The stock hit an intraday high of Rs.1124.40 and low of Rs.1095.

The total traded quantity was 2.88 lakhs compared to 2 week average of 1.74 lakhs.

Source : Equity Bulls

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