6 Points Comparison of TCS vs Infosys Stock
Detailed Performance Analysis of TCS vs Infosys Q4 Results FY2018-19
Current Statistics of TCS & Infosys
TCS vs Infosys Q4 Results FY2018-19
A) Revenue Q4 FY2019
- Q4 FY 2018-19 (Jan-2019 to Mar-2019) was a very Good quarter for TCS as per revenues in terms of Indian Rupee. Q4 revenue is Rs. 38,010 Crore with 18.5% of YoY revenue growth. In terms of USD, revenue Q4 revenue was $ 5.397 Billion with 8.5% YoY growth which is indicating a very healthy growth in the developed market. Because the GDP growth rate in such developed market economies is around 1%-2% (maximum 3%). When an Indian company (TCS) attains a growth rate of 8.5% by developing a business from such developed market economies, then it is a very positive sign for the TCS.
- YoY growth rate is 18.5% in Indian Rupees, while 8.5% in US Dollar terms. It is solely because of the currency depreciation. When we look at the growth from the Constant currency perspective, then TCS is giving a constant currency revenue growth of 2.4% QoQ and 12.7% YoY. Most of the companies generate the revenues by exporting their products and services. In such cases, a constantly fluctuating currency impacts the revenue calculation for every quarter.
- We need to understand exactly how the companies’ business is growing without any currency fluctuation. Thus, with the development of the concept of constant currency revenue growth, most of the companies now are also publishing a constant currency revenue growth by keeping the respective currencies at a constant rate from the start of the year.
Q4 FY 2018-19 was a very healthy quarter for Infosys also as per revenues. Q4 revenue is Rs. 21,539 Crore in terms if Indian Rupee, with 19.1% of YoY revenue growth. In USD, Q4 revenue was $ 3.06 Billion with 9.1% YoY growth. It Indicates that Infosys has given more revenue growth than that of TCS. Constant Currency Revenue Growth 2.1% for QoQ and 11.7% for YoY basis.
B) Operating Profit & Net Profit Q4 FT2019
- TCS : For Q4, Operating Profit margin of TCS is 25.1% indicating a very healthy operating profit margin, while Operating Profit is Rs.9,537 Crore. Net profit is Rs. 8.126 Crore or $ 1.154 Billion, with Net Profit Margin of 21.4%
- Infosys : Operating profit is Rs. 4,618 Crore and Operating Margin is 21.5%, while Net profit is and opearting profit is Rs. 4,078 Crore and Net Margin is 19%. It shows that the Opearting ae well as Net Margin of Infosys is considerably lesser than TCS.
C) Demand : New Clients Added in Q4 FY2019
- TCS : We can see from the above table, TCS has given a healthy number for the new clients added showing the demand for its products and services in the market. $100+ Million revenue 6 new clients were added, $50 Mn+ 2 clients, $10Mn+ 29 clients and $1Mn+ 37 clients were added in Q4 showing a very positive sign for TCS.
- Infosys : For Infosys also there is a positive growth in the new clients added. But according to the above table the demand for TCS is more than Infosys, since the Number of new clients is much lesser than in case of TCS in each group.
$100+ Million revenue 2 new clients were added, $50 Mn+ 1 clients, $10Mn+ 8 clients and $1Mn+ 11 clients were added in Q4 in Infosys.
D) Geographic Allocation :
1. TCS :
- North America’s allocation is around 51% in the overall business of TCS. Suppose, if TCS is getting a Total business of Rs.100, then North America’s allocation is Rs.51 ie. More than half of the business of TCS is from North America. North America’s allocation is increased to 50.7% in Q4 FY-19 from 50.2% in Q4 FY-18, in the total business of TCS.
- Europe’s allocation is increased to 30.0% in Q4 FY-19 from 29.4% in Q4 FY-18, in the total business of TCS.(% increase of 2%)
- India is contributing hardly 5.8% in Q4 FY19 from 6.2% in Q4 FY18. The reason behind the decreased allocation of India in the Overall business of TCS may be that Indian companies’ are spending very low on Technology, Automation, Digital Segments. If properly invested into the technology segment, then Indian Market would be a great place which can increase the business allocation for TCS in the near future.
2. Infosys :
- As we can see from the above table, North America is the largest contributor of Infosys, contributing 61.2% in Q4 FY2019 of the total business of Infosys in according to the Q4 figures. Its contribution has increased from 59.4% in Q4 FY2018. The business growth from North America is greater for Infosys than TCS.
- Europe’s contribution has decreased from 24.8% in Q4 FY18 to 24% in Q4 FY19. But for the same period, TCS has given positive growth in the Europe zone.
- India’s contribution was 2.8% in Q4 FY18 for Infosys which is further decreased to 2.0% in Q4 FY19.
E) Growth By Business Segments
F) Human Resource:
- TCS : Net Addition of 6,356 associates, while the closing headcount was seen to be 4,34,285. Last Twelve Months (LTM) attrition is 11.3% which is comparatively lower than its peers like Infosys, Wipro etc. So we can say that TCS is managing its resources comparatively better.
- Infosys : Net addition of 2,622 associates, while closing headcount was 2,28,123.
Last Twelve Months (LTM) attrition is 18.3% which is higher than TCS.