Nirmal Bang Institutional
A Double-digit FY20? Not Yet. Talent Hoarding Impacts Margins In 3QFY19, TCS' constant currency (CC) QoQ revenue growth at 1.8% (12.1% YoY) was in line with expectations. However, EBIT margin slipped to 25.6% (our estimate 27.2%). This has been because of lower gross margin and higher-than-expected SG&A; expenses as a significantly talentconstrained market for new age services, primarily in the US, led to what we believe as talent hoarding by TCS. That, in our view, is a pre-emptive move by TCS to handle demand fulfilment problem that players like DXC, Hexaware and Persistent Systems specifically and the industry in general has talked of in recent times (Refer: Onsite Supply Bottleneck Unlikely A One-Off). It also potentially addresses a tighter market for H1-B visas under the new rules (Refer: Likely Change In...
Number of FIIs/FPIs holding stock rose by 47 to 1444 in Mar 2019 qtr.
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