TCS becomes first Indian IT company to cross $100 bn in market-cap

In terms of market capitalisation, TCS has the largest market-cap and is ahead of companies like Reliance Industries, HDFC Bank, ITC, Hindustan Unilever

Tata Consultancy Services (TCS) has become the first Indian $100 billion- dollar company in terms of market capitalisation (market-cap) in the IT pack, after the stock hit a new high on Monday in intra-day trade.

The counter hit a new high of Rs 3,557, up 4.4% in intra-day trade, extending its Friday’s 6.7% surge, as the company reported better-than-expected March quarter earnings in post market hours on Thursday. TCS also announced 1:1 bonus shares i.e. one bonus shares of Rs 1 face value each for every share held in the company to its investors.

Also Read: After 12 quarters, TCS sees double-digit growth in dollar revenue in Q4

The 11% rise in the company’s scrip in past two trading days helped it cross Rs 6.81 trillion ($103 billion) in market-cap at around 10:33 am, the BSE data shows. The rupee was trading at 66.21 against the US dollar.

However, at the end of Monday's trade, the market-cap dipped below $100 billion level (Rs 6.54 trillion) to $ 98.44 billion as the stock erased its entire morning gains to end flat at Rs 3,415. TCS currently accounts for 11% of the total market-cap of the S&P BSE Sensex of Rs 60.81 trillion.

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In terms of market capitalisation, TCS raks ahead of Reliance Industries, HDFC Bank, ITC, Hindustan Unilever, HDFC, Maruti Suzuki and Infosys.

In its recent report, analysts at Nomura, however, have maintained a reduce rating on the stock with a target price of Rs 2,750.

"We retain Reduce as we find valuations expensive at ~20x FY20F and see risk to street expectations of ~double-digit constant currency (CC) revenue growth and flattish margins. Our caution stems from: 1) large segments US/BFSI remaining weak, growing at low- to mid-single digits y-y, with clarity on BFSI still a quarter away amid risks from insourcing at large US Banks," Ashwin Mehta and Rishit Parikh of Nomura said in a recent report.

56,000 IT jobs in danger? Infosys, TCS say they're not responsible for mess

According to reports, the 7 biggest IT firms operating in India are set to let go of 56,000 workers

In his social media post, an anonymous techie called the recent spate of layoffs in the information technology (IT) sector a "nightmare". The bad news is, the nightmare is unlikely to end anytime soon.

The seven biggest IT companies operating in India, including Wipro, Infosys, Tech Mahindra and Cognizant, are planning to layoff at least 56,000 engineers this year, Livemint reported on Thursday.

According to the report, this projected number is double the amount of layoffs by these companies last year. Mint claims the astoundingly high number was arrived at after "extensive interviews with 22 current and former employees across these seven companies".

The companies concerned are Infosys, Wipro, Tech Mahindra, HCL Technologies, US-based Cognizant Technology Solutions, DXC Technology, and France-based Cap Gemini SA. According to the report, they have denied that the mass layoffs signal a crisis and have attributed the increased layoffs to more rigorous appraisal processes.

Also Read : All ATM withdrawals not chargeable, SBI clarifies after furore in Kerala

Of course, the news of IT majors handing out pink slips has already been flowing in. On Wednesday, Tech Mahindra let go of around 1,000 of its employees. Tech Mahindra's layoffs, however, were not an outlier; Wipro fired around 500 of its employees in April, and Cognizant has signalled it could let go of close to 10,000 of its employees. (Read more)

However, Infosys has said that it does not plan to cut jobs.

Aside from the Mint report, earlier reports had also suggested Infosys was planning to hand out pink slips to hundreds of its employees at its bi-annual performance review.

According to an Economic Times report, Infosys Chief Operating Officer U B Pravin Rao has said, "I would like to put to rest any speculation around planned layoffs. As has been the case in the past, we will primarily see some performance-based exits." (more)

Wipro Q4 consolidated net rises marginally to Rs 2,267 cr

Board approves bonus issue in the ratio of 1:1; standalone net rises 20% on sequential basis

Wipro, India's third largest software exporter said fourth quarter profits grew 0.4% to Rs 2,267 crore on revenues of Rs 13,987.5 crore, a jump of 2.6%

The Bengaluru-based IT services firm said IT services revenue grew 2.7% over the previous quarter to $1.96 billion. For the fourth quarter, Wipro had projected growth between $1.9 billion-$1.94 billion or 1-2%.

Wipro has forecast its IT services revenue in the first quarter of the fiscal 2018 to be in the range of $1.92 billion to $1.96 billion.

Read more : TCS, Infosys got only 8.8% of total H-1B visas: Nasscom's rebuttal to US

“We delivered revenues within the guidance range in our fourth quarter,” said Abidali Z Neemuchwala, Chief Executive Officer of Wipro. “We are confident that the recovery in Energy & Utilities and our demonstrated strength in Digital will help us improve our growth trajectory during the course of the current financial year.”

Wipro's larger rivals Infosys and TCS too faced business and currency challenges in the quarter.

The company board approved bonus issue in the ratio of 1:1.

Standalone net profit jumped 20% to Rs 2,303 crore sequentially as compared to Rs 1,918 crore in December quarter. (more)

TCS announces share buyback; Infosys and Wipro may follow

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

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.

When asked about the company’s capital allocation plans, Rishad Premji, whole-time director and chief strategy officer, Wipro, said, “We did a buyback last year worth Rs 2,500 crore. We have a stated dividend payout ratio policy, which is 40-45 per cent, which we have maintained. We have said that on an annual basis, we actively discuss this within the company and evaluate what makes sense with the cash that the company generates. We are open to evaluating options like buyback, special dividends. It makes sense for the organisation, as we move forward.”

Buybacks are seen as the preferred route over dividends, as they are more tax-efficient. Besides dividend distribution tax at an effective rate of over 20 per cent, dividend income in the hands of all residents, except domestic companies, trusts or funds, also attracts an additional dividend tax of 10 per cent on dividend income over Rs 10 lakh a year. Read more

Full text: Why Tata Sons lost confidence in Cyrus Mistry

Even as both camps in the Tata vs Mistry boardroombattle get ready for the impending extraordinary general meetings of various Tata group companies to oust former Tata Sons chairman Cyrus as director, the war of words through statements and counter-statements do not seem to end. On Sunday, while the Ratan Tata camp alleged that Mistry misled the selection committee to become the chairman of Tata Sons, Mistry’s office stated that Ratan Tata had been repeating the same lie a thousand times and hoping it to become a truth.

ALSO READ: Mistry misled to become chairman, says Tata Sons

Here is the full text of the Tata group’s letter to stakeholders explaining why the group lost its confidence in Cyrus Mistry:

AN APPEAL FROM THE TATA GROUP TO ALL STAKEHOLDERS OF TATA COMPANIES

Extraordinary General Meetings of various Tata Companies are coming up over the next few weeks. We, at Tata Sons Ltd., the principal shareholder and promoters of the various Tata Companies, would like to thank you for your continued support. In order to assist you to exercise your shareholder rights in an informed manner, it would be appropriate to bring to your attention some key facts which resulted in the loss of confidence in Mr. Cyrus P. Mistry by Tata Sons.

1. Mr. Cyrus Mistry misled the Selection Committee set up in 2011 for selecting a Chairman of Tata Sons to succeed Mr. Ratan Tata, by making lofty statements about his plans for the Tata Group and more importantly indicated an elaborate management structure for managing the Tata Group, given its diversity of business, by suggesting a management structure aimed at dispersal of authority and responsibility. These statements and commitments from Mr. Cyrus Mistry played an important role in the Selection Committee’s final selection of Mr. Mistry as Chairman. After waiting for a period of four years, almost none of these management structures and plans have been given effect to. Clearly, in our opinion, the Selection Committee was misled in its choice of Mr. Mistry. Read more

**Wipro says Chennai flood to impact revenues, margins for December quarter**

After Tata Consultancy Services (TCS), Wipro too has issued a warning saying that disruption at its Chennai facilities due to recent floods and the costs associated with subsequent invocation of business continuity plans would have a material impact on the performance of the company in the October-December quarter of FY16.

Wipro’s warning comes on the heels of a similar announcement by India’s largest IT services firm Tata Consultancy Services.

The Bengaluru-based Wipro, India’s third largest IT services company which has over 22,000 employees in Chennai across multiple centres, said it would incur a “higher one-time cost” towards deployment of business continuity plan which would not only adversely impact its revenue performance during the quarter, but also its operating margins.

“For the quarter ending December 31, 2015, the incident is expected to have a material impact on the revenues and will result in higher one-time cost incurred towards deployment of our business continuity plan. Both these factors will impact our operating margins for the quarter,” Wipro said in a statutory filing to stock exchanges on Wednesday.

For the quarter ended September 30, 2015, operating margins for Wipro’s IT services business stood at 20.7%.

The company also said that it expects its revenues to be in the lower half of its guidance range. For the December quarter, Wipro had said it was expecting IT services revenues to be in the range of $1,841 mn -$1,878 mn.

Last week, TCS had also issued a similar warning saying that the company was expecting material impact on its revenues in the seasonally weak December quarter due to Chennai rains.

Meanwhile, Wipro said its Chennai operations has largely been restored to normal. The company is in touch with insurance companies to assess the damage. Wipro’s share price was down 0.51% at Rs 555.75 on the BSE in early trade.