- The TCS management warned analysts about the possibility of lower margins in the second quarter. Q2 earnings before interest and tax (EBIT) margins are seen growing at a slower pace than the 27.5 per cent in the first quarter.
- The TCS management also expects Q2 volume growth to be slower than the 5.3 per cent in the June quarter.
- The company has increased on-site hiring in the second quarter, which may result in higher salaries.
- TCS also cited higher growth in the APAC region, where margins are lower than average.
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Brokerages are not upbeat on the stock. Global brokerage CLSA said over ownership makes the risk-reward for the stock further unfavourable at current levels. We will use the recent strength to pare position in the stock.
What came as a negative surprise to us was the relatively downbeat margin commentary in analyst meet. Stock trades at 19-times FY13E EPS with limited upside in our view, Jefferies said.
- The TCS management warned analysts about the possibility of lower margins in the second quarter. Q2 earnings before interest and tax (EBIT) margins are seen growing at a slower pace than the 27.5 per cent in the first quarter.
- The TCS management also expects Q2 volume growth to be slower than the 5.3 per cent in the June quarter.
- The company has increased on-site hiring in the second quarter, which may result in higher salaries.
- TCS also cited higher growth in the APAC region, where margins are lower than average.
-
Brokerages are not upbeat on the stock. Global brokerage CLSA said over ownership makes the risk-reward for the stock further unfavourable at current levels. We will use the recent strength to pare position in the stock.
What came as a negative surprise to us was the relatively downbeat margin commentary in analyst meet. Stock trades at 19-times FY13E EPS with limited upside in our view, Jefferies said.
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