3384.2000 13.10 (0.39%)
NSE Jun 06, 2025 15:31 PM
Volume: 2.1M
 

3384.20
0.39%
HDFC Securities
TCS' trinity of growth', scale and durability is challenged and we find our conviction displaced. While multiple attributes of scale/durability (offshore-leverage in digital, attrition) remain intact, the impact of macros and client specifics across core verticals dent the growth outlook. We expect USD rev/EPS CAGR of 8.2/7.7% over FY19-22E, factoring USD rev growth of 6.3/9.0/9.4% for FY20/21/22E. In its downward drift however, strong payout policy (80-100% of FCF) and industry-leading margins/RoIC offer respite to valuations. We downgrade TCS to NEUTRAL (BUY earlier) and strike it off our list of conviction picks following ~4% EPS cut and a weak growth trajectory (core verticals/ deceleration in digital). Our TP is Rs 1,975 at 20x Sep-21E (24x earlier).
Tata Consultancy Services Ltd. has lost -24.19% in the last 6 Months
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