TCS declares Q4 results, revenue growth beats the expectations

India's largest Information Technology (IT) service company Tata Consultancy Services (TCS) announced its quarterly results spanning over a period of a year, on Monday. It's performance in fourth quarter beat the expectations, and its revenue is in line, snapping a six quarter spree in disappointing results.

N Chandrasekaran CEO of TCS said, "Our core portfolio performed strongly in a seasonally weak fourth quarter, driven by strong volumes-led growth in BFSI (banking, financial services, insurance), retail and manufacturing sectors. This gives us good growth momentum going into the new financial year," 

On financial front the consolidated net revenue from operations of TCS reached Rs 28449 crores in Q4FY16 compared to Rs 27364 crores in Q3FY16, an increase of 3.96 per cent quarter on quarter (QoQ). The EBITDA stands at Rs 8804 crores this quarter, as compared to Rs 8409 crores in Q3FY16, an increase of 4.70 per cent QoQ. The EBITDA margin this quarter stands at 30.95 per cent, as compared to 30.73 per cent in Q3FY16. The slow increase in EBITDA is attributed to increase in company’s other expenses by 6.64 per cent QoQ to Rs 9651 crores from Rs 9050 crores. The employee expenses of company increased by 2.92 per cent QoQ to Rs 10910 crores from Rs 10599 crores in Q3FY16. The net profit stands at Rs 6413 crores in Q4FY16 compared to Rs 6083 crores in Q3FY16, an increase of 5.42 per cent QoQ. 

For the year ending period the revenue from operations increased by 14.79 per cent YoY. In constant currency (CC) terms the growth is of 11.9 per cent. The EBITDA and net profit increased by 21.41 per cent and 22.36 per cent YoY. The EBITDA margin increased to 30.97 per cent in FY16 from 29.28 per cent in FY15. The net profit margin increased to 22.36 per cent from 20.97 per cent in Q3FY16.

On valuation front the stock of company is trading at trailing twelve-month P/E of 23.05 compared to industry P/E of 21. The stock of company closed at 2522.40, a decrease of 0.03 per cent from the previous close.