Tata Consultancy Services Ltd. share price target

TCS's Q4FY21 revenue growth of 4.2% QoQ CC was broadly in line with our optimistic estimates in a seasonally weak quarter.

We expect the IT sector revenue to grow at 14.4/10.8% (in USD terms) for FY22/23E with mid-tier IT growth to come in at 15.1/12.5%. We expect a margin expansion of ~55ps over FY21-23E (10/45 bps expansion in FY22/23E), following a 220bps expansion in FY21, leading to ~17% EPS CAGR over FY21-23E. We remain higher than consensus (HSIE EPS is ~6% ahead for FY23E) and expect the outperformance to continue. We increase multiples for Mindtree/Cyient/Zensar/Sonata and roll forward to Mar-23E for our coverage universe. Earnings for Wipro is revised downwards by 6.5/3.9% due to acquisition impact while we have increased estimates for Mindtree/Zensar/Sonata/Teamlease. We prefer INFY, HCLT, Persistent and Sonata We hosted our 5th Tech Investor forum with 20 corporates/experts participating in the event (virtual). The participants represented the full spectrum: (1) Large-cap IT services (TCS, Infosys, Wipro, Tech Mahindra, L&T; Infotech), (2) IT/ER&D; midcaps & small caps (Mphasis, L&T; Technology, Mindtree, Tata Elxsi, Happiest Minds, Zensar, Sonata, Intellect and Mastek), (3) Staffing (Teamlease) and (4) Tech industry experts (IBM, Capgemini, Salesforce, ISG, and Captive expert ANSR). The commentary across companies/experts indicated a continuation of multi-year industry tailwind (cloud acceleration) and optimism around the sector hitting and sustaining double-digit growth rate was validated

Tata Consultancy Services, a division of Tata Sons Limited, is a global IT services organization that provides a comprehensive range of IT services to its clients in diverse industries. The Company, caters to finance and banking, insurance, telecommunication, transportation, retail, manufacturing,...

Tata Consultancy Services (TCS) reported revenue growth of 4.1% QoQ CC in 3Q (v/s est. 2.3% QoQ CC). This is the best QoQ growth posted by the company since FY11 in a seasonally weak 3Q it was led by broad-based delivery across sectors and regions. Moreover, TCS improved its EBIT margin to 26.6% (+40bp QoQ; +100bp v/s our estimate) despite absorbing the full impact of a wage hike (160bps impact). Deal wins (ex-Postbank at ~USD0.5b) were USD6.8b, down QoQ on tough comps, but were up 13% from Q3 FY20. TCS reported OCF/PAT of 137% and FCF/PAT of 122%, boasting a strong...

TCS reported a second consecutive stellar performance in Q3FY21 with a beat across the board vs. our forecast. Revenue grew by 4.1% in CC (best QoQ growth in Q3 in 9 years) and EBIT margin saw a improvement of 40bps QoQ to 26.6% (a 20 quarter high). EPS of Rs23.2 grew by +5.4%/+7.2% QoQ/YoY. In Q3FY21, TCS has secured deals with TCV of US$6.8 bn (excluding the Postbank Systems deal). TCS has maintained its positive outlook and is confident of achieving a double-digit YoY revenue growth in CC for FY22. We factor Q3FY21 beat and increase our FY21/22/23E revenue (US$) by...

We recommend BUY and assign 28x P/E multiple to its FY23E earnings of Rs. 127.6 per share which gives a TP of Rs. 3,550 per share, an upside of 14%.

Tata Consultancy Services (TCS) for the quarter ended Dec 2020 reported a consolidated revenue of Rs 42015 crore, a growth of 5% QoQ and 5% YoY. On USD terms the revenue for the quarter was USD 5702 million, a growth of 5% QoQ and 2% YoY. On constant currency (CC) basis the revenue was up 4.1% QoQ and 0.4% YoY. Growth in CC revenue on sequential basis is largely due to increase in revenue of all business verticals of the company. On YoY terms the CC revenue growth was led by BFSI, Life Sciences and Technology & services. The BFSI vertical which accounted for about 31.3% of the revenue...

Read through for peers: TCS Management expects tech spend to strengthen in CY21 with strong multi-year technology transformation opportunity. There is upside to growth & margin estimates on account of faster revenue...

Double digit revenue growth expected in coming years We believe growing virtualisation of business is driving multi-year growth in IT spends. We believe IT companies will be key beneficiaries of this multiyear technology transformation phase. In the current phase, enterprises are building a cloud-based foundation that will serve as a resilient, secure and scalable digital core. In subsequent phases, enterprises will see new age technologies developed around cloud and will lead to new business models & differentiated customer experiences. TCS' investments in building deep expertise on these platforms, in research & development spends and in...

TCS's QoQ dollar revenue growth of 5.1% beat street estimates (~3.1%) in a seasonally weak quarter.