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“In India, companies may fall sick, but promoters rarely do!”

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TCS announces excellent first quarter results post Market Closing…It closed at Rs 433 but should open firm on Monday

TCS closed at Rs 433 today…It should open firm on Monday 

This evening it has announced an excellent First Quarter FY 10,despite pressure on billing rates

On Revenues of Rs 7207 crs,the PAT is Rs 1534 crs,up 15% qoq and 19% yoy.The EPS is Rs 7.83…This gives a Market Multiple of less than 14…Infosys is 18+…so expect TCS to firm up towards Rs 500  

“We have delivered Rupee Growth and Dollar Growth” says N Chandrasekaran,COO,TCS

TCS has contracted 8 Large Deals in Q 1 across several Business Verticals…..5 from USA,2 from Europe and 1 in Asia Pacific….It is pursuing potentially big 20 more such contracts

It has 141642 Employees on it’s rolls as of date and the utilisation level is 79.2% excluding Trainees and 71.3% including Trainees

TCS seems to have been very proactive in meeting challenges in a tough and very competitive Business Environment 

Market will reward this Performance and take the price to 16-18 multiple range…that’s from Rs 433 currently towards Rs 500  

However TCS remains cautious on Prospects…They never give a Guidance,like Infosys does….and say it would be foolish to predict, with any certainty,volume growth ahead…They see stability in the main BFSI Segment but see some worries in Pharma,Telcom and other sectors

DLF,Suzlon,Tatas…Stress Stake Sales at Stress Prices in Stress Times

Don’t get influenced and unduly excited by placements of part of their stakes by Promoters of DLF (at Rs 230) and Suzlon (at Rs 77) especially, and of TCS (at Rs 627)…..They have sold shares now as they desperately need funds and can’t raise it any other way……The Credit Crunch  and Contraction has simply overwhelmed the corporate sector

In fact you can even expect our government to sell some of it’s jewels…expect IPOs of PSUs in Q2 and Q3 this year…Even the Government desperately needs funds to fund the dangerously high fiscal deficit as it has reached saturation Borrowing Levels.

Otherwise,just ponder…..why did they not sell stakes in 2007 and 2008 when their Shares Prices were 5 to 10 times they are now !

So if a Foreign Bank operating in India was able to comfortably manage these placements,remember these were at stressed and possibly distressed prices…so there were many takers……not really prices at which the Promoters should sell !

But Desperate Times call for Desperate Measures

Some Wednesday Wanderings !…May’s Heat Wave causing a Lot of Bouncing !…Kingfisher Airlines Cheques…Adnan Sami…Tata’s JLR Debt woes forcing sale of TCS Shares…and our Sensex !

  • While the ‘King of Good Times’ bounces around in South Africa with his Cheerleaders cheering his ‘Royal Challengers’ in the IPL,his Kingfisher Airlines Cheques are bouncing here in India as the Airline faces more severe Royal Challenges that surely should be of a higher Priority
  • Have a look at the Times of India’s Mumbai Edition this morning…The’ve got Singer,Adnan Sami and his woes in three full blown reporting pieces on Page 1,3 and even 4 !…If you put them all together,it’s nearly a full page of Times Reporting on Adnan Sami !…They don’t even cover our PM like this ! Hey Guys ! You too have caught the ‘Bug’ Adnan Bug like his wife has !….It’s rather amusing that neither Adnan,nor his estranged wife are Indian Citizens…yet to settle their internal disputes and woes the’re using our Indian Police and Courts !…This is the beauty and graciousness of our Indian Democracy…welcoming one and all to come and use it’s facilities !….Just deport both to their own lands and see how their disputes will either be solved overnight or die a natural death quickly !…Hey ! Sami ! maybe crooning your hit song ‘Lift Kara De’ may be your prayer from out of all these woes !
  • Tata’s need to repay a bridge loan in June 2009 that was taken to part fund their purchase of Jaguar….Sigh !…yet again they have resorted to selling of part of their crown jewels !…Tata Sons have sold off 10 million shares of TCS today at Rs 627.25 to 15 different Institutions to raise Rs 627 crs…In fact in calender year 2008,TCS’s share price dropped by 44% ,twice the size of drop of competitor, Infosys….the reason was this very issue of selling pressure of  TCS shares by Tata Sons in 2008 
  •  Sensex is now 12000 and waiting for buying suckers…expect correction…the speed and scale of this 45% rise inside two months begs for it !
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