Month: July 2008

India’s number one IT Services and Consulting Company, TCS reported flat revenues $1,525m which were below consensus estimates. EBITDA margins were 22.1%. TCS reported lower than expected forex loses boosting Net Profit for Q! FY09 to Rs 12.4b.

Volumes increased 1.3% while blended pricing declined ~90bp qoq. Decline in pricing was due to lower product revenues and less revenues from transformational deals. The company said that it has signed ~12 large deals in Q1 and is working on 20 more such deals which are still in the pipeline.

The management does expect growth to revert in the coming quarters. TCS trades at ~13x FY09E, which is close to historic lows and at ~18% discount to Infosys. For FY09 the company is expected to report an EPS of Rs 60.

BGR Energy System’s Power Projects Division has secured an EPC contract from Rajasthan Rajya Vidyut Utpadan Nigam (RRVUNL) for the 2 x 600 MW Kalisindh Thermal Power Project.

The EPC order from the RRVUNL is for Kalisindh Thermal Power Project. The EPC contract worth Rs 4,900.06 crore will be executed over 39 months for Unit I and 42 months for Unit II.

Tanla Solutions Limited’s (TSL) Q1FY09 performance was better than our expectations. TSL Net sales stood at Rs 1688.6mn in Q1FY09 against Rs 894mn in QFY08, grew by 88.9% YoY. TSL Profit stood at Rs 564mn in Q1FY09 against Rs 332mn in Q1FY08, grew by 69.9% YoY. TSL posted a Basic EPS of Rs 5.64 in Q1FY09.

Some of the moves in Q1 that will have a positive impact on the company in the forthcoming quarters are,

• Tanla’s acquisition of 85% in Finland based Openbit for US$15.81 million at a total valuation of US$18.60 million.
• Premium SMS partnerships live with all operators in India.
• Interactive Campaign Manager product launched in India, to help
  enterprises / telecom operators to manage, set and run mobile
  campaigns
• Product M Raga ( innovative mobile radio ) signed up with Bharti Airtel in 2 circles expected these service to roll out in the Second Quarter Q2FY09.
• Signed up voice portals with BSNL to set up voice portals in all 23 circles in India covering GSM networks

We prefer Tanla Solutions over OnMobile in the Mobile Value Added Services space in India.