TCS (Q4 FY07) Result Snapshot - "Below expected lines"

TCS posted modest results for Q4 FY07 with revenu es and earnings growing 5.9% and 6.6% respectively. The operational performance was far below expectations with decline in operating margin by 50 bps qoq. If not for the higher other income from forex cover and stake sale in JV company, PBT would have grown by just 3.9% qoq. Management has indicated continuation of revenue growth momentum and stable OPM for FY08.

Outlook

We are revising our FY08 EPS forecast marginally downwards by 0.9% to Rs53.7 mainly to factor underachievement of our expectations in Q4 FY07. We maintain BUY rating wi th a one-year target price of Rs1,558 representing 24.3% upside from current levels.

Click below for the detailed Result Update:
http://www.indiainfoline.com/content/rep/Result_Analysis/2007/4/1842007/tcs_0307.pdf

Warm Regards,

Rajiv Mehta
India Infoline Ltd.

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