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| India Infoline Research Team / 15:13 , Jul 26, 2010 |
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CMP Rs412, Target Rs436, Upside 5.7%
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IT services revenue growth ahead of guidance but modest in comparison to peers
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Strong growth in multiple verticals; product engineering and package implementation drive growth amongst services
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Margin improvement was a surprise; net profit growth was strong 7% qoq
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Robust revenue growth guidance for Q2 FY11; attrition control measures to hurt margin
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Upgrade estimates but retain Market Performer recommendation
Result table
| (Rs m) |
Q1 FY11 |
Q4 FY10 |
% qoq |
Q1 FY10 |
% yoy |
| Net sales |
71,906 |
69,784 |
3.0 |
64,146 |
12.1 |
| Operating profit |
15,918 |
15,094 |
5.5 |
14,648 |
8.7 |
| OPM (%) |
22.1 |
21.6 |
(50) bps |
22.8 |
(70) bps |
| Depreciation |
(1,884) |
(1,806) |
4.3 |
(1,798) |
4.8 |
| Interest |
(403) |
(236) |
- |
(528) |
- |
| Other income |
1,809 |
2,093 |
(13.6) |
(339) |
(633.6) |
| PBT |
15,440 |
15,145 |
1.9 |
11,983 |
28.8 |
| Tax |
(2,345) |
(2,924) |
(19.8) |
(1,864) |
25.8 |
| Effective tax rate (%) |
15.2 |
19.3 |
- |
15.6 |
- |
| Share in Assoc./Min. int. |
157 |
141 |
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36 |
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| PAT |
13,252 |
12,362 |
7.2 |
10,155 |
30.5 |
| PAT margin (%) |
18.4 |
17.7 |
70 bps |
15.8 |
260 bps |
| EPS (Rs) |
21.7 |
20.2 |
7.2 |
16.6 |
30.3 | Source: Company, India Infoline Research
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