The 59 reports from 18 analysts offering long term price targets
for Tata Consultancy Services Ltd. have an average target of 2076.60. The consensus estimate
represents an upside of 3.82%
from the last price of 2000.25.
Hints At Momentum For Double-digit Growth In FY20, But BFSI Is Flatlining SELL We had a meeting with the management of Tata Consultancy Services (TCS) recently. We came away from the meeting a tad bit more positive on its FY20 revenue outlook. While it stated that the current momentum in most verticals would take TCS to double-digit growth in FY20, we still believe it may fall a tad shy off double digit. We understand that about 200bps-250bps of FY19 revenue growth came from major orders that it won in 2HFY18 connected with its insurance platform. We have not seen announcement of similar kind of deals so far in 4QFY19. We therefore expect growth in FY20 to be a tad slower than in FY19. Some of the other key takeaways from the meeting include the following: (1) After a...
While growth momentum remains intact for now, one needs to be cautious on the likelihood of the same sustaining through the course of CY19. Barring Automotives and Hi-tech, traction is sanguine in other segments of the business
Currency fluctuations weighed on dollar revenue growth TCS delivered muted performance in Q3FY19 with consolidated revenue growth of 0.7% QoQ in dollar terms due to cross-currency headwinds. However, constant currency (CC) revenue growth stood at 1.8% QoQ/12.1% YoY in an otherwise seasonally weak quarter. The CC growth YoY (the highest in 14 quarter) was driven by continued acceleration across key verticals and geographies. Vertically, the growth was powered by BFSI (8.6% YoY), retail (10.5%), Telecom (10.8%) and life-sciences (15.7%), while UK (25.1%) & Europe (18%) led growth geographically. Further sustained momentum in digital business (grew strongly...
Other income jumped 59% to Rs 1163 crore and interest cost fell 88% to Rs 16 crore. After providing for depreciation (up 2% to Rs 519 crore), PBT went up 3% to Rs 10711 crore. Provision for taxation grew 6% to Rs 2590 crore after which PAT grew 2% to Rs 8121 crore....
Tata Consultancy Services (TCS) the largest IT services exporter in India has witnessed strong demand in Q3FY19 across segments. Strong traction was also seen in digital space, digital space reported strong growth of 53% for Q3 FY19 on YoY basis.
Maintain BUY with TP of Rs 2,430, at 24x Dec-20E EPS, supported by leading organic growth within tier-1 IT and >60% RoIC, >4% FCF yield & >3.5% dividend yield. TCS posted acceleration in revenue (in-line) supported by strong digital traction (53% YoY) and continued revival in BFSI. However, margins were lower on increased hiring and higher sub-contracting expense (both indicative of buoyant demand). Rev came at USD 5,250mn, 1.8/12.1% QoQ/YoY CC with digital at 30.1% of rev (USD 6.3bn rev annualised).
We largely maintain our FY19E/20E revenue (in US$) and tweak EPS forecast by -1.0%/1.7% (FX of Rs70 for Q4FY19 and FY20). We maintain ACCUMULATE with new TP of Rs2,084 (vs. Rs2,121 earlier) based on 22x FY20E. Q3FY19 CC revenue growth of 1.8%/12.1% QoQ/YoY despite seasonal weakness Both QoQ CC growth and US$ growth of 0.7% was in-line with our forecast. While smaller verticals like Life Sciences & Healthcare (7.6% of revenue; +15.7% YoY in CC) and Energy & utilities (4.7% of revenue; +18.1% YoY) grew faster, larger verticals like Retail & CPG (16.5% of revenue; +10.5% YoY) also saw good growth. Importantly, BFSI (30.8% of revenue) saw improvement in growth to +8.6% YoY....
A Double-digit FY20? Not Yet. Talent Hoarding Impacts Margins In 3QFY19, TCS' constant currency (CC) QoQ revenue growth at 1.8% (12.1% YoY) was in line with expectations. However, EBIT margin slipped to 25.6% (our estimate 27.2%). This has been because of lower gross margin and higher-than-expected SG&A; expenses as a significantly talentconstrained market for new age services, primarily in the US, led to what we believe as talent hoarding by TCS. That, in our view, is a pre-emptive move by TCS to handle demand fulfilment problem that players like DXC, Hexaware and Persistent Systems specifically and the industry in general has talked of in recent times (Refer: Onsite Supply Bottleneck Unlikely A One-Off). It also potentially addresses a tighter market for H1-B visas under the new rules (Refer: Likely Change In...
TCS posted a 0.7% sequential growth in USD revenues to US$5,250mn v/s US$5,215mn in 2QFY2019. In rupee terms, revenues came in at `37,338cr V/s `36,854cr, up 1.3% QoQ. In Constant Currency (CC) terms, the company posted a 1.8% QoQ growth. On profitability front, EBIT margin showed a dip of ~90bps QoQ to 25.6%. Consequently, PAT
Robust TCV Growth Signals Strong Biz Momentum; Margin Disappoints Tata Consultancy Services (TCS) has reported a decent CC revenue growth of 1.8% QoQ in 3QFY19, while USD revenue came in softer-than-expected at US$5,250mn (+0.7% QoQ, below our estimate by 0.8%) owing to a higher-than-expected adverse cross-currency impact. Its TCV order bookings grew by a robust >20% QoQ to US$5.9bn (vs. US$4.9bn in 2QFY19), with bookto-bill rising strongly to 1.12x (vs. 0.94x in 2QFY19), which signals a strong traction in underlying business growth. On the flip side, its EBIT margin declined by 90bps QoQ to 25.6% (missing our estimate by 73bps) owing to higher wage cost and SG&A; expenses. Net profit rose by 2.6%...
There was disappointment at the margin level as EBIT margins declined 90 bps QoQ to 25.6% (vs. our 27% estimate). The margin decline was mainly on account of net cross currency headwind and increase in employee and sub-contractor cost (negative 60 bps) Macro uncertainty clogs visibility of double digit growth beyond FY19E TCS had a weak show in the quarter with a miss at revenue growth mainly on account of 2.1% QoQ decline in traditional business. Growth was a miss due to de-growth in BFSI (0.6% QoQ) and flat growth in retail...
10 January 2019 EBITDA increased 21.7% YoY (5% miss) and PAT grew 24.1% YoY (our the US, as evident from the 70bp QoQ uptick in subcontractor expenses. TCS cited that demand on the ground was very healthy and broad-based across regions and verticals. This was reflected in deals TCV of USD5.9b v/s USD5b in the previous two quarters, with healthy contribution from North America (USD3b+), BFSI (USD2b+) and Retail CPG (USD800m+). With respect to elevated onsite cost, TCS expects it to rationalize over a period of time via investments in training and also passing some of it to clients. The trend of supply shortage was called out by a few companies in 2QFY19 (INFO, MTCL and HEXW), which cited challenges in demand fulfilment at onsite. TCS 9MFY19 EBIT margin of 25.7% is after YoY INR depreciation of 8.4% for this period.
We recently met the management of TCS to discuss its outlook on the demand environment, revenue growth trajectory going forward, its digital strategy and potential challenges relating to H1-B visa issues...
TCS posted a 3.2% sequential growth in USD revenues to US$5,215mn v/s US$5,051mn in 1QFY2019. In rupee terms, revenues came in at `36,854cr V/s `34,261cr, up 7.6% QoQ. In Constant Currency (CC) terms, the company posted a 3.7% QoQ growth. On profitability front, EBIT margin showed an upside of ~148bps QoQ to 26.5%. Consequently, PAT came ..
TCS posted solid performance in Q2FY19 with strong dollar revenue growth of 3.2% QoQ (CC revenue growth of 3.7%). Revenue outperformance was driven by broad based growth across segments and service lines. Further robust demand for digital services coupled with continued traction in BFSI and retail verticals also aided growth. Digital business continued to perform well with revenue contribution increasing to 28% in Q2FY19 from 25% in Q1FY19. Notably, BFSI (31.2% of overall revenue) and retail (16.6%) verticals continue to gain momentum with revenue growth of 3.5% and 3.4% QoQ respectively. Additionally,...
India's biggest software exporter Tata Consultancy Services Q2 profit jumps 23% YoY to Rs 7,901 crore, meets Street estimates Sequentially TCS registered an 8% rise in consolidated sales to Rs 36854 crore for the quarter...
Tata Consultancy Services Ltd Q2FY19 results Comment Revenue grew by 7.57% to Rs. 36854.0 Cr in Q2FY19 when compared to the previous quarter. Also, it grew by 20.67% when compared with Q2FY18.
Maintain BUY with TP of Rs 2,400, at 24x Sep-20E EPS supported by >60% RoIC and >4% FCF yield TCS strong performance (in-line) was digital-led and driven by momentum in core verticals, robust client metrics and deal signings. Revenue came at USD 5,215mn, 3.7/11.5% QoQ/YoY in CC terms (3.5% QoQ est) which was its fastest growth in three years (in YoY CC terms). EBIT margin was in-line at 26.5%, +148bps QoQ (26.3% est) impacted by INR depreciation. APAT stood at Rs 79.27bn, 7.7% QoQ supported by lower ETR
TCS reported an in-line operating performance in Q2FY19 with 3.7% QoQ CC (+11.5% YoY) revenue growth and 26.5% EBIT margins. YoY growth returned to double-digit trajectory after nine quarters and management is confident of rounding off the year with similar momentum. TCS remains our preferred pick amongst IT large-caps due to its (1) systematic and timely investment in digital capabilities, (2) growth visibility buoyed by recent large...
