BUSINESS

Make way for the new IT czar

By Kishor Kadam in Mumbai
June 11, 2004 08:10 IST
Tata Consultancy Services, which recorded total revenues of over Rs 7,000 crore (Rs 70 billion) in 2003-04, is the largest software company in India.

In comparison, Wipro, the biggest listed software company in the country, posted a total turnover of Rs 5,169 crore (Rs 51.69 billion) in fiscal 2003-04.

TCS to offer 5.54 cr shares via IPO

With TCS making its numbers public for the first time, information technology major Infosys Technologies has been pushed back to the third slot among the software companies in India.

Infosys reported a turnover of Rs 4,769 crore (Rs 47.69 billion) in 2003-04. If TCS prices its initial public offering at a premium of Rs 1,000 a share, as the markets expect, then it will be the cheapest software stock in terms of price-earnings ratio.

In fiscal 2003-04, the company posted a net profit of over Rs 1,800 crore (Rs 18 billion). This gives an earnings per share of Rs 39.52 on a Re 1 share and a P/E of 25.30.

Wipro is currently traded at a P/E of 38.78 and Infosys Technologies at a P/E of 28.25.

TCS, the Number One Indian software company by revenues, will also top the

market cap sweepstakes in the software sector. Its market cap of around Rs 40,000 crore (Rs 400 billion) to Rs 43,000 crore (Rs 430 billion) on listing is expected to exceed that of Wipro, which has a market cap of Rs 35,492 crore (Rs 354.92 billion). Infosys Technologies, which has a market cap of Rs 35,123 crore (Rs 351.23 billion), will be pushed down to the third spot.

TCS' market cap on listing has been worked out assuming that it will offer 6.37 crore (63.7 million) share of Re 1 each at a premium of Rs 875-950. With the total paid-up capital in 45.55 crore (Rs 455.5 million) shares, its market cap works out to be Rs 45,550 crore (Rs 455.5 billion).

TCS emerges on the top in net profit ranking also. It posted a net profit of Rs 1,800 crore in 2003-04.Infosys Technologies with a net profit of Rs 1,243 crore (Rs 12.43 billion) will be relegated to the second position.

Wipro with a net profit of Rs 915 crore (Rs 9.15 billion) in fiscal 2004 ranks at Number 3. TCS posted a 54.4 per cent rise in revenues in fiscal 2004.

The revenues grew at a compounded annual rate of 34.3 per cent in the last seven years.

Its revenue was $489 million in 2000, $689 million in 2001, $880 million in 2002 and $1.04 billion in 2003.

Kishor Kadam in Mumbai

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