TCS

This Tata group company is India's second biggest outsourcer and its has outperformed its rival Infosys across most parameters, establishing its position as the bellwether of India's over $100 billion IT sector.  On all five fronts – growth, margins, visibility, better employee morale and valuations, TCS has been scoring high. In Q2FY14, the company posted the highest volume growth in last nine quarters at 7.3% v/s the 3.1% volume growth of Infosys. The best part, financially, about TCS has been its margins, which have constantly beaten all estimates and even in current Q2, operating margins were at over 30% and in current fiscal, the IT company expects margins to be around 26-28%.

TCS does not give guidance but the management stated that it expects to beat NASSCOM’s 12-14% growth estimation for the sector and FY14 is expected to be much better than FY13. The company had ended FY13 with a net profit at Rs.13,941 crore. TCS had ended H1FY14 with a consolidated net profit at Rs.8473 and with two more quarters to go, clearly it is on the right track to surpass FY13 earnings. Apart from investors, employees also seem to prefer TCS as the attrition rate of the company stands at 10.9% v/s 17.3% of Infosys. Its employee utlisation rates have also been above 80%. The foreign exchange loss for Q2 was reported at Rs 377 crore. The Q2 utilisations excluding trainees came in at 83.4% and 75% including trainees. The gross employee addition stood at 17,362. Q3 expectations should be lower as seasonally, the third quarter is always the weakest.