**TCS – Q3 FY20 (Audited –Cons)**
Total revenue from operations at 39,854 Cr
37,338 Cr (6.72%) YoY | 38,977 Cr (2.25%) QoQ
Nine Months ending revenue: 117,003 Cr Vs. 108,453 Cr (7.85%)
Net Profit of 8,143 Cr
8,121 Cr (0.28%) YoY 8,058 Cr (1.05%) QoQ
Nine Months ending Net profit: 24,354 Cr Vs. 23,410 Cr (4.03%)
EPS (in Rs.) 21.63
21.60 YoY | 21.43 QoQ
Nine Months ending EPS: 64.74 Vs. 61.41
View: Result is in line with the estimation. YoY and QoQ revenue and profit both have increased. Although profit increased very marginally in YoY and QoQ due to higher of employee cost.
**Business Updates & Highlights**:
Constant currency revenue growth: +6.8% YoY
Operating Margin at 25%; Net Margin at 20.4%. Operating profit, or earnings before interest and taxes, rose 6.5 percent to Rs 9,974 crore. Operating margin expanded 100 basis points to 25 percent.
Segment wise revenue growth: Revenue growth was led by Life Sciences & Healthcare (+17.1%), Communications & Media (+9.5%) and Manufacturing (+9.2%). Other verticals - BFSI (+5.3%), Retail & CPG (+5.1%) and Technology & Services (+3.3%)- showed more modest growth.
Markets: Growth was led by Europe (+15.9%) and MEA (+10.8%). and UK (+7.5%). North America and Asia Pacific grew 4.1% and 5.7% respectively. India grew 6.4% while Latin America grew +6.2%
As on December 31, 2019, the company has applied for 5,006 patents, including 132 applied during the quarter, and has been granted 1,211 patents.
Net addition of 22,390 employees YTD (9 months ending Dec 2019), headcount addition moderated in Q3 FY20. The headcount stood at 446,675 as of December 31, 2019.
ROE and ROCE is around 38% and 48% respectively and book value per share is around INR 229 and share is currently trading at 9.7x of its book value. Company is currently trading at annualized PE of around 26 which is slightly high as per Industry benchmark. Promoter holding in the company is around 72%, FIIs and mutual fund hold around 15.5% and 5.2% respectively. Company has strong cash and cash equivalent of around INR 11,132 Cr as of Dec 2019.
The Directors have declared a Third Interim Dividend of Rs.5 per Equity Share of Re.1 each of the Company record date is 25th Jan, 2020. Earlier it was paid around INR 5 and INR 40 respectively for this financial year its around INR 50 per share.
**Share View**: Share price high 2296 (52 week) and now 2218. TCS part of the Tata group, India's largest multinational business group, TCS has over 446,000 of the world's best-trained consultants in 46 countries. The company generated consolidated revenues of US $20.9 billion in the fiscal year ended March 31, 2019. TCS is the flagship company of Tata group and cover more than 60% of their market cap. Company is no. 1 software Exporter Company in the country, very innovative and focus on various diversified IT segment business and continuously improving year on year. TCS is also paid good dividend and also bonus to shareholders at various occasions.
Long term investor should continue with the company and should be added on every dip/correction.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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