Tata Sons likely to earn record Rs 27,797 crore from its listed firms

 The analysis is based on the annual dividend paid/declared by listed Tata group companies every financial year

Tata Sons, India’s biggest promoter in the private sector, is expected to earn a record Rs 27,797 crore via equity dividend and proceeds through share buyback from its listed group companies for the financial year 2021-22. This amount is up 17.6 per cent from Rs 23,663 crore that it pocketed in FY21. Nearly two-thirds of these proceeds will show up in Tata Sons’ financial results for FY22, thanks to the quarterly interim dividend by its cash cow Tata Consultancy Services (TCS). The software major also completed its Rs 18,000 crore worth of share buyback programme for FY22 …

FM Sitharaman announces big-bang package for MSMEs to revive economy

Rs 6-trn stimulus includes Rs 3 trn of collateral-free loans; Rs 30,000-crore special liquidity scheme for NBFCs, HFCs, MFIs

Union Finance Minister Nirmala Sitharaman on Wednesday announced a set of stimulus measures of nearly Rs 5.94 trillion to provide relief to various constituents of the Indian economy. They are micro, small, and medium enterprises (MSMEs); taxpayers; non-banking financial companies (NBFCs); power distribution companies; the real estate sector; organised sector employees; and contractors working with the government.

These measures are part of the Rs 20-trillion “Atmanirbhar Bharat” package, announced by Prime Minister Narendra Modi on Tuesday. The finance minister said she would make announcements pertaining to different sectors every day, starting Wednesday, as the government looks to kick-start economic activities even as the nationwide Covid-19 lockdown is expected to continue beyond May 17.

ALSO READ: Bigger reforms coming, we’ll see a V-shaped recovery: CEA Subramanian

The immediate fiscal impact of Wednesday’s announcements could be less than Rs 20,000 crore, even though analysts differ on that. The key measures were aimed at MSMEs, with a Rs 3-trillion credit guarantee fund for collateral-free automatic loans, a Rs 20,000-crore subordinate fund for stressed MSMEs, and a Rs 50,000-crore equity infusion “fund of funds”.

HDFC Bank is the most valued brand in India, LIC takes second spot: Survey

The top rung is unchanged but overall brand value growth slows to 6% in 2019 from 34% in the previous year: BrandZ

HDFC Bank beat the crowds to top the list of 75 most valued brands in India, keeping its position intact from the previous year. At second and third spots, too, the old order held its grip. Public sector insurer Life Insurance Corporation of India (LIC) and IT major Tata Consultancy Services (TCS) retained their second and third ranks in the list of most valued Indian brands.

The big change, however, has been in the overall growth of brand values in the BrandZ 2019 Most Valuable Indian Brands, a report by WPP and Kantar Millward Brown. The total value of the top 75 brands increased to $228.2 billion, growing at a moderate 6 per cent over 2018, far slower than 34 per cent recorded the previous year. The report calculates valuations and ranking by combining companies’ financial data with consumer insight and opinion.

While brands grappled with many challenges this year, a few managed to push valuations up significantly. With a 34 per cent jump in brand valuations, Jio led the band of top risers, a diverse set of brands on the list. Preeti Reddy, CEO South Asia, Insights Division, Kantar, said, “They (Reliance Jio) have built an entire ecosystem around Jio which is feeding into each other and they continue to be disruptive.” Among the other brands that increased their valuations at a significant clip are Infosys, TCS, Maggi, Ola, and others….

Infosys vs TCS: Which stock is a better bet at the current levels?

Post the results, most brokerages have revised their price targets for both these stocks.

Infosys and Tata Consultancy Services announced their respective June quarter results for the financial year 2019 – 20 (Q1FY20) last week. While Infosys registered 5.26 per cent rise in its Q1FY20 net profit at Rs 3,802 crore, TCS saw an uptick of 10.74 per cent in its profit after tax (PAT) to Rs 8,153 crore.

An uptick in demand for its digital services, apart from a momentum in the large deal space, prompted the Infosys to raise its FY20 revenue guidance to 8.5-10 per cent from 7.5-9.5 per cent as guided earlier. The company now plans to return 85 per cent of the free cash flows (FCF) in the form of buybacks or dividends on a five-year cumulative basis (70 per cent earlier).

Post the results, most brokerages have revised their price targets for both these stocks. For TCS, The number of ‘buy’ ratings for the stock has reduced from 27 to 23, while ‘sell’ calls have increased from 7 to 9. The average 12-month price target has also seen a slight reduction On Monday, Infosys reacted to the Q1FY20 results announced post market hours on Friday, with the stock rising over 4 per cent to Rs 758 levels.

Here’s how brokerages have interpreted Infosys‘ results:

Nomura

We believe increased FY20F revenue growth guidance, strong deal win momentum and improved capital allocation policy are positive. Our target price of Rs 680 is based on 16.5x FY21F EPS of Rs 41.4. The stock is trading at around 17x FY21F EPS on consensus estimates. We prefer HCL Technologies in the IT services space. Material margin improvement and an improvement in the growth trajectory in BFSI/retail are key risks to our thesis.

Jefferies

Management indicated broad-based demand across verticals & geographies, helped by digital adoption and large transformation projects. In BFSI, challenges in select US banks due to M&A and in capital markets across Europe & US are being offset by strength in other segments, such as retail banking and cards & payments. European manufacturing and healthcare are relative weak spots. High attrition in Q1FY20 was partly attributed to seasonality and involuntary attrition.

TCS spend on employees is justified: Tata Sons chairman N Chandrasekaran

Chandrasekaran said sometimes specialist skills don’t depend on the qualifications but on the employee’s experience

Tata Consultancy Services (TCS) shareholders cheered the company’s movement to the spot ahead of IBM in market cap at the 24th annual general meeting on Thursday, though many of them were apprehensive of the rising employee cost, especially retaining some staff beyond the age of 60 and even in some cases 72. Some of them raised concerns that the company may be splurging a lot of money given that over 100 employees now earn more than Rs 1 crore towards salary.

Tata Sons Chairman N Chandrasekaran, however, justified the employee costs. “It’s not correct to say that the company is paying too much to the top management. If you see, TCS management deserves a lot of credit across the board for producing excellent results and the company would like to reward them,” he said.

Chandrasekaran, who had a long stint at the TCS helm before taking over as the chairman of Tata Group, said sometimes specialist skills don’t depend on the qualifications but on the employee’s experience. “Some employees have been requested to work with us despite crossing their retirement age,” he said, “because of the value addition they offer to a very complex organisation”. While the company will not compromise on the industry leading employee cost to revenue ratio, they will seek to optimise cost further, he said.

Among other top concerns the shareholders raised were about the need to have more clarity on digital revenues and various technology areas within the new technology services to which the company attributes 28 per cent of its revenues.

Reliance Industries market cap touches $100-bn mark, stock at record high

RIL became the second Indian company to scale the milestone after TCS.

 

Reliance Industries (RIL) market capitalisation (market cap) surpassed the $100 billion mark, after its stock price soaring to a record high of Rs 1,090, up 5% on Thursday on the BSE in intra-day trade. It became the second Indian company to scale the milestone after TCS.

At 11:56 am; RIL market cap stood at Rs 6.88 trillion or $ 100 billion mark, the BSE data shows. The stock was quoting at Rs 1,088, up 4.9%. On comparison, the S&P BSE Sensex was up over 1%.

Earlier, Mukesh Ambani-led RIL broke the $100 billion barrier in 2007. Tata Consultancy Services (TCS), the IT giant, is on top of the rank with Rs 7.57 trillion market cap, data shows.(CLICK HERE : Reliance Industry share price)

The rally in RIL comes after it announced an aggressive plan in its 41st annual general meeting and ahead of its June quarter earnings.

Mukesh Ambani, Chairman and Managing Director in the AGM launched ultra high speed fixed line broadband services for homes and enterprises under the brand of JioGigaFiber on July 5. “Fiber will redefine 24/7 emergency help for all homes across India and Jio will offer the most competitive broadband connection.”

The oil-retail-to-telecom giant has invested Rs 2.5 lakh crore in fiber connectivity.

RIL’s net profits grew by more than 20.6 percent to Rs 36,075 crore in FY18. Reliance’s earnings profile underwent a fundamental change this year.(Article source : BS) 

TCS gains 3% as Q1 profit beats Street estimate

TCS Q1FY19 CC revenue growth at 4.1% QoQ is a meaningful beat to estimates and is highest in several quarters.

Shares of Tata Consultancy Services (TCS) rose 3% to Rs 1,928 per share on the BSE in early morning trade after the country’s biggest software services exporter posted a better-than-expected rise of about 23.5% year on year (YoY) and 6.3% quarter on quarter (QoQ) in first-quarter (Q1) net profit, helped by strong growth in its banking, financial services and insurance division (BFSI).

TCS has recorded a consolidated net profit of Rs 73.40 billion in April-June 2018 (Q1FY19) versus a profit of Rs 59.45 billion in the same quarter last year. While the revenues at the reported currency grew 15.8% YoY and 6.8% QoQ to Rs 342.61 billion, in constant currency (CC) terms, it rose by 9.3% year-on-year (YoY) and 4.1% sequentially.

Analysts on an average had expected profit of Rs 69.67 billion on revenue of Rs 341.69 billion for the quarter.

“TCS Q1FY19 CC revenue growth at 4.1% QoQ is a meaningful beat to estimates and is highest in several quarters. Revenue recovery has gathered further momentum with a definite growth revival in BFSI and retail verticals. Slowdown in these two verticals had adversely impacted FY18 growth and with the recovery double digit constant currency revenue growth is almost a certainty,” Antique Stock Broking said in a result review.

Overall, FY19 has started on a strong note for TCS. Company will outshine peer group in FY19 with CC revenue growth of ~12% while most of the peer group will grow at mid-single digit. TCS will also report YoY EBIT margin improvement and company has maintained aspirations to achieve 26%-28% EBIT margin range. Robust deal signings in 1QFY19 is after a very strong order booking in 4QFY18, the brokerage firm said with ‘buy’ rating on the stock and 12 month target price of Rs 2,090.(CLICK HERE : TATA COMPANY SHARE PRICE)

“TCS reported an above-expected operating performance in Q1FY19 driven by a beat on both revenue and margins. With a growth recovery in BFSI services in North America, management is confident of sustaining growth momentum in the medium term. Digital revenue growth accelerated for the fifth straight quarter, rising 44.8% YoY in CC terms,” analysts at BOB Capital Markets said in result review.

TCS is our only BUY-rated stock among tier-I players as we believe it is best placed to weather the structural challenges visible in legacy revenue portfolios. We have a Mar’19 target price of Rs 2,190 for the stock, revised from Rs 2,180 earlier as we tweak EPS estimates to factor in the Q1 performance, the brokerage said.

At 09:34 am; TCS was trading 2% higher at Rs 1,917 on the BSE, as compared to 0.11% rise in the S&P BSE Sensex. A combined 4.9 million shares changed hands on the counter on the BSE and NSE so far. The stock had hit an all-time high of Rs 1,930 on Monday, July 9, 2018 on the BSE in intra-day trade.

 News Source : BS

Infosys stock slumps 5% most since August 21, 2017; NSE IT index falls 1%

Wipro, TCS and HCL Technologies ended with gains of more than half a per cent

 

Infosys Ltd is a global technology services firm that defines designs and delivers information technology (IT)-enabled business solutions to their clients. The company provides end-to-end business solutions that leverage technology for their clients including technical consulting design development product engineering maintenance systems integration package-enabled consulting and implementation and infrastructure management services.

The company also provides software products to the banking industry. They have developed Finacle a universal banking solution to large and medium size banks across India and overseas. Infosys BPO is a majority owned subsidiary. Through Infosys BPO the company provides business process management services such as offsite customer relationship management finance and accounting and administration and sales order processing.

The company is having marketing and technical alliance with FileNet IBM Intel Microsoft Oracle and System Application Products. Infosys Ltd is a public limited and India’s second largest software exporter company was incorporated in the year 1981 as Infosys Consultants Pvt Ltd by Mr.N.R.Narayana Murthy at Karnataka.

Infosys shares fell 4.55 per cent on Thursday, the most since August 21, 2017. The stock ended at Rs 1,284 after climbing to a lifetime high of Rs 1,354 on Tuesday.

The stock is still up 24 per cent this year. In comparison, the benchmark Nifty has gained two per cent and the Nifty IT index, a gauge for the performance of technology stocks, has gained 20 per cent in 2018. The NSE IT index on Thursday fell just 1.1 per cent as other heavyweights Wipro, TCS and HCL Technologies ended with gains of more than half a per cent amid the rupee closing at a new low of 68.94 against the dollar.

The exact reason for the sell-off in the stock, which caused a market cap erosion of Rs 131 billion, was not evident.

Read More :- Infosys  share price

Trump wrong about H-1B? Threat of 'being Bangalored' illogical: US study

In fact, report says immigration bans will lead to greater outsourcing by US firms

 

 

Did US President Donald Trump get his H-1B visa math wrong? A report by a US think tank, the National Foundation for American Policy (NFAP), thinks he did.

One of the key findings of the report was that fears in the US that H-1B visas granted to foreign workers, especially Indian techies, were draining the job market of opportunities for the natives were exaggerated at best, and, "illogical" if seen in the context of data.

The 9,356 new H-1B petitions for the top seven Indian-based companies approved in financial year 2016 represent "only 0.006 per cent of the US labour force" , the report said, adding that while the "threat of job loss has long been exaggerated by critics, it reaches illogical proportions when discussing fewer than 10,000 workers in an economy that employs 160 million workers nationwide".

In April this year, Trump signed an executive order called 'Buy American and Hire American' to protect the American industry from unfair competition and stop the "misuse" of H-1B visas| economy news

• The numbers just don't add up

According to the 'H-1B Visas by the numbers' report by NFAP, the April 2017 unemployment rate in the US for "computer and mathematical science" occupations was 2.5 per cent – a very low rate, even lower than the 4.4 percent for "all occupations", according to Bureau of Labor Statistics data. The unemployment rate for "architecture and engineering" occupations is even lower at 2.1 per cent.| economy policy

• More jobs than workers
• Visa restrictions could actually kill more jobs
• Trump's lower wages argument may be wrong too

Trump's new order: Indian IT sees red as H-1B visa window gets smaller

Analysts say the impact on Indian entities would not be immediate

 

An executive order signed by US President Donald Trump on Wednesday (Indian time) to protect American industry, has also targeted Indian information technology services firms, who depend on H-1B visas to send engineers to work on projects to the US. 

Trump has directed his top administration officials — the Secretaries of State, Labor and Homeland Security along with the Attorney General — to suggest reforms, so that the H-1B visas are given to the most skilled or highest paid beneficiaries. 

The move by Trump will help Silicon Valley-based entities such as Google, Facebook and Oracle to take advantage of the programme to get more engineers from India to work on projects back home. At the same time, it is expected to hurt outsourcing companies majors here, such as Tata Consultancy Services (TCS), Infosys and Wipro, which traditionally have used the H-1B visa programme to send engineers to work on projects at customer locations in America. 

This has riled the National Association of Software and Services Companies (Nasscom), which says there is a campaign to discredit the Indian services sector and the move would hurt the American economy, as the US faces a shortage of computer engineers. It would benefit only Silicon Valley companies at the cost of the rest of America.

“Regarding the concept of reorienting the H-1B lottery to be a system that prioritises the “most-skilled or highest-paid” visa applicants, the (US) Administration needs to be careful about unintended consequences,” it stated.

“Using salary levels as the metric is not necessarily the best indicator of benefits to the US economy. And, unless such a system reflects variations in wages in all parts of the US, it could advantage certain regions such as Silicon Valley over other regions of the US.” 

TCS, this country’s largest software exporter, says it has reduced the number of visas it has applied over the past few years, and has several local development centres in the US, hiring local engineers.

“We have to watch what the visa issues are. Are they going to be constraints for having the right people on projects? We have taken a view of this and our dependency on visas has been reducing. Our strategy is to move to a regime where our operating model should be visa-neutral,” says N G Subramaniam, chief operating officer at TCS.

(read more)

Get rid of 3-month notice period: Techies ask govt to ease quitting process

latest | The government should make it easier for IT professionals, who are expecting single-digit hikes in the coming financial year, to exit their jobs, an online petition signed by over 28,000 professionals has demanded, reported The Economic Times on Thursday.

Their complaint? The three-month non-negotiable notice period that most IT firms hold their employees to. According to the report, the petition said, "It is unrealistic for anyone to plan that far ahead for their future actions and resign in advance not knowing state of the issue in next three months." The petition has been addressed to the Union Ministry of Labour & Employment.

Speaking to the financial daily, an IT professional, who did not want to be named, said that no company would be willing to wait for three months while their new employee serves out his or her period at their old firm. Further, the report said that Tata Consultancy Services, Infosys, Tech Mahindra, HCL Technologies, Capgemini, Accenture and IBM had a three-month notice period in place.

Growing pains

Indian companies are likely to provide single digit increments to their employees in 2017, across industries, an Aon Hewitt survey said recently. “The survey projects a drop in pay increases to an average of 9.5 per cent across industries. While it’s a marginal decrease from the 2016 (10.5 per cent) spends, it reflects maturity that India Inc has displayed amid global and Indian economic and political events. This includes recent changes in the US government and the much-talked demonetisation,” the report said. Aon Hewitt, the global talent, retirement and health business of Aon plc, conducted its 21st annual survey after speaking to more than 1,000 companies.

The Indian IT sector, and its employees, will not escape this predicament either. According to ET, Tech Mahindra has already suspended the salary revision process for employees with more than six years of experience, pending a management review.

The petition comes at a time when the IT sector is gearing for a shake up. As reported earlier, Indian IT services players may have to re-skill significant chunks of their workforce to drive the digital technology transformation. A report from global advisory firm McKinsey & Company, which was presented at the Nasscom India Leadership Forum last month, said that nearly half of the workforce in the IT services firms would become “irrelevant” over the next three-four years. 

Further, digital disruption is not the only thing worrying the industry. Last month, industry body Nasscom unexpectedly postponed issuing a growth projection for 2017-18, a first in 25 years, in the wake of uncertainty due to regulatory changes in the US and the macroeconomic outlook. 

(Read more) 

TCS announces share buyback; Infosys and Wipro may follow

Investors eye a piece of the large cash kitty as growth slows

COMPANY NEWS | Barely a week after the US-based software services player Cognizant Technology Solutions, which has several delivery centres in India, announced plans to return $3.4 billion to its shareholders through buyback of shares and dividends, Tata Consultancy Services (TCS), too, said its board would be meeting on Monday to consider a buyback plan.

In a statement to stock exchanges on Thursday, TCS said, “We would like to inform you that the board of directors will consider a proposal for buyback of equity shares of the company at its meeting to be held on February 20, 2017.” If approved, this will be TCS’ first buyback since its listing in 2004.

The Street took the news positively, as stocks of domestic information technology (IT) majors - TCS, Infosys, Wipro, Tech Mahindra and HCL Technologies - were up 1.4-3 per cent on Thursday.

 

ALSO READ: Communication with shareholders vital for smooth execution: Rishad Premji

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Lack of communication cost Cyrus Mistry his job?

Ratan Tata arrives at Tata group's head office Bombay House in Mumbai.

In keeping with the practice of promoting Tata group company CEOs to the board of Tata group holding company, Tata Sons, Jaguar-Land Rover CEO Ralf Speth and Tata Consultancy Services (TCS) CEO & Managing Director N Chandrasekaran were on Tuesday appointed additional directors on the TSL board.

ALSO READ: Chandra, Ralf Speth join Tata Sons board

Ratan Tata, interim chairman of Tata Sons, said: “This is in recognition of their exemplary leadership at their companies.” 

Earlier, during the tenure of Ratan Tata, RK Krishnakumar, MD of Tata Tea, and JJ irani, MD of Tata Steel, had been promoted to the Tata Sons board. Similarly, late JRD Tata had appointed late Sumant Moolgaokar and late Darbari Seth on the board TSL.

PM According to media reports, lack of of communication is the reason behind Cyrus Mistry's replacement. CNBC-TV18, quoting sources, said that Ratan Tata & Tata Sons were not informed about major business decisions. Ralf Speth, CEO of Jaguar Land Rover and N. Chandrasekaran, CEO & Managing Director of Tata Consultancy Services (TCS), have been appointed as Additional Directors on the Tata Sons Board.