The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.
Sharekhan's research report on Tata Consultancy Services
Demand stayed robust led by higher spending on growth & transformation (G&T) initiatives, technologies and operations. G&T initiatives are likely to offer TCS huge growth opportunities given its robust contextual knowledge and full service model. TCS has a proven track record of gaining market share in the fragmented IT industry across cycles. Hence, we believe TCS will be considered as a preferred partner for any strategic vendor consolidation exercise in an inflationary environment. Margin levers such operating leverage, pyramid balancing, improved realisations and currency tailwinds are expected to offset the margin headwinds to a large extent in FY2023. COLA and better pricing would drive margin gradually. We continue to prefer TCS led by its robust business model, healthy order intake, excellent payout ratios and a strong client base.
Outlook
Hence, we maintain a Buy on the stock with a revised PT of Rs. 3,800.
More Info
At 14:19 hrs Tata Consultancy Services was quoting at Rs 3,049.80, down Rs 92.55, or 2.95 percent.
It has touched an intraday high of Rs 3,110.55 and an intraday low of Rs 3,023.35.
It was trading with volumes of 237,370 shares, compared to its thirty day average of 120,495 shares, an increase of 97.00 percent.
In the previous trading session, the share closed down 2.01 percent or Rs 64.45 at Rs 3,142.35.
The share touched its 52-week high Rs 4,045.50 and 52-week low Rs 3,133.20 on 18 January, 2022 and 28 July, 2021, respectively.
Currently, it is trading 24.61 percent below its 52-week high and 2.66 percent above its 52-week low.
Market capitalisation stands at Rs 1,115,937.49 crore.
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