Tata Consultancy Services Ltd's Q1FY20 consolidated net profit rises 0.1% qoq to Rs8,131cr : Beats Estimates

The company’s consolidated revenue stood at Rs38,172cr, up 0.4% qoq and 11.4% yoy.

Jul 09, 2019 11:07 IST India Infoline Research Team

Tata Consultancy Services Ltd Q1FY20

Consolidated Results Q1FY20: (Rs in cr)

Q1FY20 QoQ (%)
Revenue 38,172 0.4
EBIT 9,220 [3.3]
EBIT Margin (%) 24.2 [94]
Net Profit (adjusted) 8,131 0.1
***EBIT margin change is bps
TCS reported a mixed set of numbers for Q1FY20 with marginal miss coming on revenue and EBIT margin front. INR revenue grew by 0.4% qoq and 11.4% yoy to Rs38,172cr, which is lower than median consensus estimates of Rs38,513cr. Constant currency (cc) revenue grew by 10.6% yoy and dollar revenue came in at USD5,485mn (+1.6% qoq and +8.6% yoy). EBIT stood at Rs9,220cr, down 3.3% qoq but up 7.5% yoy against median consensus estimate of Rs9,358cr. EBIT margin contracted by 94bps qoq and 88bps yoy to 24.2%. PAT grew by 0.1% qoq and 10.8% yoy to Rs8,131cr against median consensus estimates of Rs7,839cr.
  • Digital revenues grew by 42.1% yoy cc and now accounts for 32.2% of overall revenues.
  • The growth was broad-based with Life Sciences & Healthcare leading the pack, growing 18.1% yoy cc. BFSI grew by 9.2% yoy cc, Retail & CPG grew by 7.9% yoy cc, Communications & Media grew by 8.4% yoy cc, Technology & Services was up 7.8% yoy cc and Manufacturing grew by 5.5% yoy cc.
  • All major markets showed strong growth momentum. Growth was led by UK (+16% yoy cc), India (+15.9% yoy cc) and Europe (+15% yoy cc). Other markets continued to grow well, North America (+7.7% yoy cc) and Asia Pacific (+9.5% yoy cc).
  • Attrition rate stood at 11.5%.
  • The management indicated that there might be some stress emerging in the European banks but overall, there aren’t significant headwinds that they would like to call out. The currency appreciation could hurt margins as per the management.
  • USD100mn+ clients grew by 4 yoy, USD50mn+ clients grew by 3 yoy, USD20mn+ were up by 13 yoy, USD10mn+ were up by 29 yoy and USD5mn+ were up by 43 yoy.

Technical View:

Tata Consultancy Services Ltd ended at Rs. 2,131.45, down by 44.65 points or 2.05% from its previous closing of Rs. 2,176.10 on the BSE.
The scrip opened at Rs. 2,170.50 and touched a high and low of Rs. 2,175 and Rs. 2,090 respectively. A total of 51,09,951 (NSE+BSE) shares were traded on the counter. The stock traded above its 50 DMA.

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