Challenges galore! Infy, TCS revenues won't jump in Q4

Written By Unknown on Sabtu, 07 Maret 2015 | 21.03

FY15 has not been a great year for Indian IT and FY 16 has numerous challenges in store for the sector. That explains why top software exporters Infosys and Wipro are betting on new technology trends like artificial intelligence and automation to win new clients.

FY15 has not been a great year for Indian IT and FY 16 has numerous challenges in store for the sector. That explains why top software exporters Infosys and Wipro are betting on new technology trends like artificial intelligence and automation to win new clients. However, this drive will take 2 to 3 years to bear fruit. So in the mean ime IT giants  Infosys & TCS have sounded a word of caution. Speaking at the Morgan Stanley conference in California,  TCS has said that revenue growth will not climb significantly from that a year ago.

They have been hoping for some kind of an uptake when it comes to their commentary in the overall demand environment, in the individual vertical performance; but so far it remains sluggish and the commentaries that they had given last quarter has not changed this quarter.

What TCS says is that Q4 for this year should be in line with last year's Q4. However, the headwind with respective currency volatility will remain a big concern. In fact, they are likely to see a 200 basis points headwind when it comes to the overall revenue figure in dollar terms and about 275 basis points overall impact on the revenue. Individual vertical wise energy, insurance continue to remain a significant concern and telecom is likely to perform lesser than expected. But silver lining is that BFSI has slightly risen this quarter and they have not seen any major hits when it comes to individual client setbacks.

Aside from that, Infosys —what Vishal Sikka has said in today's concall and analyst's takeaway was essentially that, "It will take a long time for Infosys to actually deliver results from the initiatives that are being taken," which is of course their renew and new strategy. However, what he did say is that they are working towards arresting attrition and that should be within 12-14 percent. Around 1,600 employees have left so far in the Jan to March quarter. So, that would be a little bit of an impact. He says that he will present a concrete plan by April end, not mid April and to be slightly patient as no major turnaround can be expected soon.

TCS stock price

On March 05, 2015, Tata Consultancy Services closed at Rs 2696.35, down Rs 47.05, or 1.72 percent. The 52-week high of the share was Rs 2834.00 and the 52-week low was Rs 2160.00.


The company's trailing 12-month (TTM) EPS was at Rs 104.29 per share as per the quarter ended December 2014. The stock's price-to-earnings (P/E) ratio was 25.85. The latest book value of the company is Rs 224.90 per share. At current value, the price-to-book value of the company is 11.99.


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