3620.4000 180.10 (5.24%)
NSE May 12, 2025 15:31 PM
Volume: 2.2M
 

3620.40
5.24%
HDFC Securities
We continue to believe that TCS' trinity of growth-scale-durability is challenged as risks to large deal ramp-up and cut in discretionary spend have increased. While TCS' supply metrics are resilient, demand dent is overwhelming with a deeper NorthAm/BFS impact and limited exposure to higher velocity verticals. Gains arising out of vendor consolidation/market-share, pipeline conversion and new business opportunities (accelerated cloud migration, remote solution & cybersecurity) will be offset by cuts to IT budgets, we've factored 6.1/8.5% decline in FY21 Rev/PAT. Valuations at 19.4x FY22E is in-line with its 10-yr avg. We maintain REDUCE on TCS following a miss on rev and slightly better operating performance. Demand-related factors to worsen while supply constraints are expected to recover ahead. The parallels to GFC are apparent (similar trajectory expected in 1HFY21), although this will be more broad-based. TCS estimation of recovery in 3Q-4QFY21 is a steep ask in context of 1HFY21 decline, but premised on its order-book and pipeline. Our TP of Rs 1,680, is based on 19x FY22E EPS (~5% cut in EPS est).
Geojit BNP Paribas decreased Buy price target of Tata Consultancy Services Ltd. to 3671.0 on 23 Apr, 2025.
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