TCS Q2 2010 results

Tata Consultancy Services(TCS) India’s largest software company by revenues has announced its Q2 2010 results today.

It was really a good performance by TCS in the second quarter of 2010 fiscal.

The net profit of TCS in Q2 2010 stands at whopping Rs1,642 crores.

The net profit was by 7.1% Q-o-Q and 29.2% Y-o-Y.

The net revenues of the company in the second quarter stood at Rs 7,435 crores which was up by 3.1% Q-o-Q and 6.9% Y-o-Y.

The company has beat the street estimates by a huge margin.

CEO Mr. N.Chandrasekaran said ” TCS has delivered a sterling performance during the quarter”

The company has announced 150% of the quarterly component of the variable pay in this quarter to all the Indian employees in its payroll. TCS plans to add 8000 people to its current payroll in the coming quarter.



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TCS down by 50%

TCS stocks went down 50% on Jun 16 !




What has caused the 5o% drop in price?

The 1:1 bonus share issue has caused this proce correction.

India's top technology outsourcer Tata Consultancy Services (TCS) announced its results for the quarter ended March 31, 2009.The net profit rose 7 percent to Rs.1333crore and the board of directors has recommended a final dividend of Rs.14 per share for FY09 and 1:1 bonus share.

This is the second bonus issue by the company since it went public five years ago. The last time that the company came out with a bonus issue was in April 2006, which was also a one-for-one issue.

Tata Consultancy Services (TCS) has fixed Jun 17 as record date for bonus issue.
Since bonus share has been declared there has to be a correction in price right?
the correction factor for ratio A:B is (A+B)/B
Since the ratio here is 1:1 it would be (1+1)/1=2.

So the stock price after bonus will be
Previous close price/ correction factor = 778.60/2 = 389.3
Hence the 50% drop!