TOP 3 INDIAN IT COMPANIES = INFY = TCS = WIPRO - FY 10 RESULTS = COMPARED

TOP 3 INDIAN IT COMPANIES

TCS – INFOSYS - WIPRO

HOW DO THEY

COMPARE IN FY 10

The TOP 3 IT companies of India, namely, TCS, INFOSYS and Wipro  have always been registering excellent growth rates and improving their revenues at a dizzying rate. Wipro is a more diversified company. But, TCS and Infosys enjoy more IT verticals in more territories.

The margins of Infosys and TCS are better than Wipro – over all. Wipro has declared its non-consolidated results – but other two have declared both consolidated and non-consolidated results – to the exchange.

In the absence of the consolidated results of Wipro – a fair comparison seems difficult. Yet, the following figures of the 3 IT bigwigs on non-consolidated (stand alone basis) coupled with INFY and TCS consolidated results do give us some insights.

NET PROFIT MARGIN ON NET SALES :

TCS Consolidated revenues (Net Sales only) are the highest at Rs. 30028.92 Cr. Its net profits are Rs.7000.64 crores, which gives a net profit margin of 23.31%.

INFOSYS Consolidated revenues (Net sales only) are  Rs. 22742 Cr. Its net profits are Rs.6266 Cr, which gives a net profit margin of 27.55%.

Wipro’s  non –consolidated Revenues  are  Rs.23177.60 Cr while its net profits are  Rs. 489800 Cr, giving a net profit margin of 21.13%

TCS non consolidated revenues are Rs. 23044.45 Cr while its net profits are Rs. 5618.51 Cr – which gives a Net profit margin of 24.38% (against 23.31% on consolidated basis)

INFOSYS non consolidated revenues are Rs. 21140 Cr while its net profits are Rs. 5803 Cr – which gives a net profit margin of 27.45% (against 27.55% on consolidated basis).

This clearly shows that INFOSYS enjoys the highest margins among the top 3 – while revenues are highest for TCS on a consolidated way.

EPS PER RS.1/- FACE VALUE:

For INFOSYS – the Basic EPS is Rs.100.37 for non consolidated and Rs.108.99 for consolidated  results – against the face value of Rs.5. Hence per Rupee face value the same works out to Rs.20.07 andRs.21.8 respectively.

For TCS – the basic EPS is Rs. 28.61 for non-consolidated and Rs.35.67 for consolidated – on a face value of Rs.1.

For WIPRO – the basic EPS on a non-consolidated basis is Rs.33.61 on a Face value of Rs.2. Hence per Rupee face value the same works out to  Rs.16.8.    

DIVIDEND & BONUS :

For TCS, dividend this year at Rs.20/- per share of Rs.1 – is the highest among the three companies.(which is 2000% per share). TCS had declared a Bonus last year in the ratio of 1:1.

Infosys has declared 500% on its Rs.5 share. Infosys had declared Bonus issue in 2006 in the ratio of 1 :1. It seems, next bonus issue is overdue for its investors.

Wipro has declared 300% on its Rs.2 share. Wipro has also declared a 2:3 Bonus this year.

PUBLIC SHARE HOLDING :

Public holding (%) is highest in INFOSYS at 65.32%, followed by TCS at 25.88 % and last is WIPRO at 18.83%.

As and when the 25% public shareholding is implemented, WIPRO may  need to –either divest promoters’ stake or go for a public issue or a right issue for the public shareholders.

PROSPECTIVE GROWTH  RATES FOR FY11:

Infosys is likely to grow at over 16% -as indicated by it in some communications. Its presence in North America, where margins are highest, seems to be strongest – and becoming stronger in FY11.

TCS and WIPRO have not given any guidance. But, TCS has been bagging some BIG TICKET clients regularly in the recent past. WIPRO too has bagged a few BIG CLIENTS in India and abroad recently.

It is therefore felt that current Year could see dizzying speeds of Growth for Infosys and TCS and moderate speed for Wipro – unless the client growth in the rest of FY11 changes the scenario .

PRICE EARNINGS RATIO :

INFOSYS IS  quoting a MP of  Rs.2720. Its EPS is 100.37. Hence PE ratio is – 27.1 on non consolidated basis.

TCS is quoting MP of Rs.744.Its EPS is 28.61.Its PE ratio is – 26 (on Non consolidated basis)

WIPRO is quoting a MP of Rs.385. Its EPS is 33.61..Its PE ratio as of now is  11.45. But since the Bonus issue of 2:3 is there, this needs to be factored in.  It then works out approximately to 20.16

SUMMING UP :

TCS has been a more regular bonus and dividend issuer in recent years. Considering this – and its dizzying growth rate, it deserves the higher PE ratio. Infosys has been delaying the Bonus issue and its dividends though great by market standards, are inferior to TCS. WIPRO falls as a clear 3^rd.

Hence, present PE ratios appear to be justified. Considering the expected growth rates – all the 3 are  A CLEAR BUY – for medium term investors.

(Note : readers are requested to give their points of view, suggestions ,CORRECTIONS, if any - which will be graetfully accepted)

FY10-Results In lakhs of Rs	Infy Non -consol	TCS Non -consol	Wipro non -consol	TCS consol	Infy consol
Net sales / services	2114000	2304445	2317760	3002892	2274200
SIT & WIP	-	-	-11100		-
Raw Materials	1155900	-	98920		1207100
traded goods	-	-	311280		-
Other Expenditure	-	849035	1090550	1045480	-
Gross Profit	958100		828110		1067100
General Admn	124700		114130	1506575	162600
Selling and Distrib.	97400	1684213	138270		118400
Depreciation	80700	46935	57960	66089	90500
Operating Profit	655300	620232	517750	803366	695600
Interest	-	954	-8260	1610	-
OPT after int &EI	655300	637038	526010	828963	695600
Other Income	91900	17760	42870	27207	94300
P B T	747200	637038	568880	828963	789900
Tax Expense	171700	75187	79080	119697	168100
NPT after tax	575500	561851	489800	700064	621800
Net Profit	580300	561851	489800	700064	626600
Dividend (%)	500%	Rs.20 /Sh	300%	20/Sh	-
Face Value (in Rs.)	5	1	2	1	5
Paid-up Equity	28700	29572	29360	29572	28600
Reserves	2276300	1482090	1739680	1817100	2276300
Basic EPS BEF. EI	100.37	28.61	33.61	35.67	108.99
Public holding (%)	65.32	25.88	18.83	25.88	65.32

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