TCS Q2 net may rise 21% at Rs 4580 cr: Motilal Oswal
According to Motilal Oswal, Tata Consultancy Services (TCS) to report a 20.7 percent growth quarter-on-quarter (growth of 30.4 percent year-on-year) in net profit at Rs 4,580.3 crore.
October 15, 2013 / 09:42 IST
Motilal Oswal has come out with its second quarter (July-September) earnings estimates for information technology sector. The brokerage house expects Tata Consultancy Services (TCS) to report a 20.7 percent growth quarter-on-quarter (up 30.4 percent year-on-year) in net profit at Rs 4,580.3 crore.
Revenues are expected to increase by 15.6 percent Q-o-Q (up 33.1 percent Y-o-Y) to Rs 20,798.2 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 26.4 percent Q-o-Q (up 46.7 percent Y-o-Y) to Rs 6,515.1 crore.Motilal Oswal's Report on Tata Consultancy Services:We expect 2QFY14 revenues to grow 4.9 percent QoQ to USD 3,321m, driven by 5 percent organic revenue growth in CC terms, ALTI contribution
of 1.2 percent, and negative cross-currency impact of -1 percent Q-o-Q.In rupee terms, we expect revenue growth of 15.6 percent Q-o-Q to INR 208 billion.There will be marginal impact from promotions during the quarter, along with integration of lower margin ALTI. Despite these, we expect
EBITDA margin to expand 270bp Q-o-Q to 31.3 percent.Our SGA assumption for the quarter is 17.3 percent (v/s 18.6 percent in 1QFY14).We expect negative other income of Rs 588 million (v/s Rs 2.5 billion in 1QFY14), driven by forex loss of Rs 2.5 billion during the quarter.Our PAT estimate stands at Rs 45.8 billion, up 20.7 percent Q-o-Q. PAT margin would be 22 percent, up 90bp Q-o-Q. We have assumed effective tax rate of 24 percent (similar to 1Q).TCS has maintained its guidance of beating Nasscom's growth guidance of 12-14 percent for FY14.The stock trades at 21.4x FY14E and 18.7x FY15E EPS.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
