Emkay Global Financial's report on Tata Consultancy Services
TCS reported strong revenue growth of 4.2% qoq/5.9% YoY in CC terms, broadly in line with estimates. Despite the integration of low-margin deals (Post Bank and Pramerica), EBITM expanded 20bps QoQ on the back of strong revenue growth and robust operating efficiencies. Revenue growth was broad based, led by BFSI (7% CC QoQ), Retail & CPG (4%), Manufacturing (3.9%), Life Science & Healthcare (3.8%), Technology & Services (2.8%) and Communication and Media (1.8%). All geographies posted sequential growth.
Outlook
We largely retain our EPS estimates for FY22/23 (<1% change) after incorporating FY21 performance. TCS is well poised to benefit from strong demand, acceleration in cloud adoptions and digital transformation opportunities; however, the current valuation largely captures those factors. Retain Hold with a TP of Rs3,150.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More