TCS Q1 FY22 - Earning Analysis | Globe Capital Market LTD.
TCS Q1 FY22 – Earning Analysis

At the CMP of Rs. 3253, the stock is trading at full year ttm P/E multiple of 36.2 times with the ttm EPS of Rs 92.46 per share.

Q1 FY22 Overview and Verdict
Rs. 3253
Lower than estimates

At the CMP of Rs. 3253, the stock is trading at full year ttm P/E multiple of 36.2 times with the ttm EPS of Rs 92.46 per share.

The Company has posted a 28.5% increase in consolidated net profit at Rs 9,008 crore for the first quarter ended June 30, 2021 as compared to consolidated profit of Rs 7,008 crore in the same quarter a year ago.

The consolidated revenue from operations increased by 18.5% to Rs 45,411 crore compared to Rs 38,322 crore in the corresponding quarter of 2020-21.

The Company has reported an EPS of Rs 24.35 against Rs 18.68.

The board has recommended a dividend of 7 per share.

The full impact of salary hike was seen in the first quarter for the company. TCS’ operating margin narrowed to 25.5% from 26.8% in the preceding quarter. Wages and salary hikes had a 170-basis-point impact on margin, partially offset by exchange rate gains of around 30 basis points.

Net Cash from Operations at Rs. 10,296 crore i.e. 114.3% of Net Income

Core Markets and Verticals grow 4.1% in CC; Overall volume grows 4.4%

Diverse and inclusive workplace: Women in the workforce: 36.2%  in 155 Nations.

The Company won new deals worth $8.1 billion. The company bagged deals worth $31 billion in FY21.

Segment Revenue BFSI, retail and manufacturing were the growth drivers for TCS in the first quarter.

Management Takeaways:

The Company has overcame the challenges posed by the second wave of Covid-19 in India taking some practical approaches and is satisfied that the delivery of all its client engagements was kept on track. It once again had a superior quarter with a TCV of $8.1 billion which is broad based across markets and verticals. Its G+T themes are seeing traction in the market place and it is delighted to sign its largest SaaS deal ever for the TCS BaNCS Global Banking Platform on the cloud during the quarter.

The Company has added highest ever quarterly net headcount of 20,409. As on today the Company has total workforce of 509,058.

Best in class talent retention: LTM IT Services attrition rate at 8.6% which is lowest in the industry.

All verticals showed good sequential as well as YoY growth. Growth continued to be led by Life Sciences and Healthcare (+7.3% QoQ, +25.4% YoY). Retail and CPG also bounced back to double digit growth, growing 4.4% QoQ and 21.7% YoY. BFSI (+3.1% QoQ, +19.3% YoY), Manufacturing (+4.8% QoQ, +18.3% YoY), Technology & Services (+5% QoQ, +12.3% YoY) and Communications & Media (+1.7% QoQ, +6.9% YoY) also saw significantly improved performance.


Globe Capital Market Limited (“GCML”) is a Stock Broker registered with BSE, NSE and MSEI in all the major segments viz. Capital, F & O and CDS segments. GCML is also a Depository Participant and registered with both the Depositories viz. CDSL and NSDL. Further, GCML is a SEBI registered Portfolio Manager. GCML includes subsidiaries, group and associate companies, promoters, directors, employees and affiliates.

Globe Commodities Limited, Globe Derivatives and Securities Limited & Globe Fincap Limited are subsidiaries of GCML. Rolex Finvest Private Limited, A to Z Consultants Private Limited, A to Z Venture Capital Limited, M. Agarwal Stock Brokers Private Limited, A M Share Brokers Private Limited, Shri Adinath Advertising Company Pvt. Ltd., Orient Land base Private Limited, Bolt Synthetic Private Limited, Price ponder Private Limited and Lakshya Impex Private Limited  are associates of GCML. Globe Comex International DMCC is step down subsidiary of GCML.

This report has been prepared by GCML and published in accordance with the provisions of Regulation 19 of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014, for use by the recipient as information only and is not for general circulation or public distribution. This report is not to be altered, transmitted, reproduced, copied, redistributed, uploaded, published or made available to others, in any form, in whole or in part, for any purpose without prior written permission from GCML. The projections and the forecasts described in this report are based on estimates and assumptions and are inherently subject to significant uncertainties and contingencies. Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections are forecasts were based may not materialize or may vary significantly from actual results and such variations will likely increase over the period of time. This report should not be construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to any securities, and neither this report nor anything contained therein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. It does not constitute a personal recommendation or take into account the particular investment objective, financial situation or needs of any individual in particular. The research analysts of GCML have adhered to the code of conduct under Regulation 24 (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. The recipients of this report must make their own investment decisions, based on their own investment objectives, financial situation or needs and other factors. The recipients should consider and independently evaluate whether it is suitable for its/ his/ her/their particular circumstances and if necessary, seek professional / financial advice as there is substantial risk of loss. GCML does not take any responsibility thereof.

Any such recipient shall be responsible for conducting his/her/its/their own investigation and analysis of the information contained or referred to in this report and of evaluating the merits and risks involved in securities forming the subject matter of this report. The price and value of the investment referred to in this report and income from them may go up as well as down, and investors may realize profit/loss on their investments. Past performance is not a guide for future performance. Actual results may differ materially from those set forth in the projection.

This report has been prepared by GCML based on the information available in the public domain and other public sources believed to be reliable. Though utmost care has been taken to ensure its accuracy and completeness, no representation or warranty, express or implied is made by GCML that such information is accurate or complete and/or is independently verified. The contents of this report represent the assumptions and projections of GCML and GCML does not guarantee the accuracy or reliability of any projection, assurances or advice made herein. Nothing in this report constitutes investment, legal, accounting and/or tax advice or a representation that any investment or strategy is suitable or appropriate to recipients’ specific circumstances.

Since GCML or its associates are engaged in various financial activities, they might have financial interest or beneficial ownership in various companies including subject company/companies mentioned in the report. GCML or its associates have not received any compensation for investment banking or merchant banking from the subject company in the past 12 months.  GCML or its associates might have received any compensation including brokerage services and for products or services other than investment banking or merchant banking from the subject company in the past 12 months. It is confirmed that GCML or research analyst or its associates have not managed or co-managed public offering of securities for the subject company in the past 12 months.

Research analyst or GCML or its relatives’/associates’ have no material conflict of interest at the time of publication of this report. Neither research analyst nor GCML are engaged in market making activity for the subject company. It is confirmed that research analysts do not serve as an officer, director or employee of the subject company. It is also confirmed that research analyst have not received any compensation from the subject company in the past 12 months.

No material disciplinary action has been taken on GCML by any regulatory authority impacting Equity Research Analysis activities.

The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. This information is subject to change, as per applicable law, without any prior notice. GCML reserves the right to make modifications and alternations to this statement, as may be required, from time to time.

Research analyst or GCML or its relatives’/associates’ do not have actual/beneficial ownership of 1% or more in securities of the subject company, at the end of the month immediately preceding the date of publication of the document.