TCS may grow by mid-double digits in FY13: Angel Broking

Tata Consultancy Services' (TCS) first quarter net profit rose 11.87% quarter-on-quarter to Rs 3,280.5 crore.

In an interview to CNBC-TV18, Ankita Somani, telecom analyst at Angel Broking says, the results are than the expectations. "I expect FY13 to be divergent in terms of the growth rates of the Tier-I IT pack. We expect TCS to grow by mid-double digits, while Infosys is expected to grow not more than 5-6%," she adds. Below is the edited transcript of her interview on CNBC-TV18. Q: From the first look, it seems that TCS has delivered a strong set, managing to meet expectations. What are your thoughts? A: Definitely, they have met the expectations. Infact they are better than the expectations in terms of the sales and profit. Margins are definitely inline with the expectations, but dollar revenue growth of 3% is higher. So, the results are encouraging. Q: In comparison to Infosys, how would you rate TCS performance? A: I expect FY13 to be divergent in terms of the growth rates of the Tier-I IT pack. We expect TCS to grow by mid-double digits, while Infosys is expected to grow not more than 5-6%. The stock is trading at a premium valuation. The street is giving it premium for the performance that it is giving. Q: Overall, though there are some concerns, especially concerning the global economic headwinds, but sectorwise also BFSI for TCS has seen a bit of pressure. In that light, how do you see the stock performing? Today, TCS closed lower. A: That was just a sentimental impact because of the Infosys results. Infosys results were quite below expectations. The expectations were very low and the results coming in below that also was a concern. That led to the hampering of stock prices of all the IT companies. Q: How would you rate TCS now? A: Right now, I think TCS is trading at a premium. So, we are more or less neutral. But it’s one of the defensives bets in IT sector. It can actually give you returns in the near-term.