TCS-----------Quarterly Update:

 Stable Quarter but propagating   with decreased momentum 

TCS is the India's largest IT service provider.The company has total count of 58 subsidiaries provides end-to-end technology and technology related services to corporations all over the world .TCS has strong domain expertise in banking, financial services & insurance (BFSI), retail & consumer packaged goods, telecom, media & entertainment, manufacturing, life sciences & healthcare, energy resources & utilities, travel transportation & hospitality and hi-tech.TCS has made significant investments in ‘Digital Five Forces’ - mobility, social computing, big data, cloud and artificial intelligence/robotics. Digital enterprise software and solutions unit of TCS is rapidly growing its customer base, products and services portfolio and digital professionals.

Growth Factors: 

• Revenue: Recent Q1FY16 shows  revenue (USD) rises 35% QoQ and 93% YoY basis. Constant currency revenue growth stood  at 3.5% QoQ and 15.8% YoY and  Volume growth stood at 4.8% .

• Operating Profit : Operating Income posted at  67,484 Mn and  Operating Margin stood at  26.3%  and Net Income posted  at  57,089 Mn which amounts for  Net Margin of 22.2%.Operating profit grew by 2.4 percent sequentially to Rs 6,748.4 crore and margin declined 91 basis points to 26.3 percent due to wage hikes and rise in visa cost, which were estimated at Rs 6,605 crore and 25.64 percent, respectively.

• Demand: Recent quarter number shows xisting as well as new client addition. Clients in $100M+ revenue band increased by 1, in $50M+ revenue band by 1 and in $20M+ revenue band by 10.Strong growth in BFS, Retail, Life Sciences and Telecom; North America & UK .

• People: Human Resources added to the comapny baseline .Number posted gross addition of 20,302 associates, closing headcount comprises  324,935.

• TCS has declared an interim dividend of Rs 5.50 per equity share and fixed July 21, 2015 as the record date for the purpose of payment of dividend

Key Risk:

• Global Economic Situation:  Company major revenue comes from North America & Europe.Although economics situation in these economy showing sign of recovery still  company is in constant search to find out the new markets Company focus on Increased efficiency and overall business vertical growth to mitigate the risk.

• Restrictive cross border mobility legislation:Tariff trade barrier  by  some countries may lead to multitude of challenges. Mobility of resources across the globe will be impacted, leading to increased costs and margin pressures.

• Integration risks in M&A:The Company’s post-acquisition challenges include cultural, financial and technology integration risks which if not inscribe in requisite manner   could result in failure to achieve the strategic objectives of the acquisition and the resultant synergy expectations.

 Conclusion:

 During Q1,  T CS posted the incremental revenues of $136 million driven by strong growth across core markets led by North America, UK, Europe, MEA and Asia-Pacific. Growth among industry segments was led by Retail, Life Sciences, BFSI and Teleco.T CS has market cap of 4938662.62 Cr which makes it a heavyweight in the sector. RONW of the company  at 43.05% and ROCE 53.73% in peer comparison which shows the better performance in terms of returns   with the other companies in the sector.However with current valuations Stock is bit expensive .