Tata Consultancy Services Ltd. share price target

TCS reported a stellar performance in Q2FY21 with a beat across the board vs. our forecast. Revenue grew by 4.8% in CC and EBIT margin saw a whopping improvement of 260bps QoQ to 26.2% (an 8 quarter high). EPS of Rs22.5 grew by 20.3%/4.9% QoQ/YoY. In Q2, TCS has secured deals with TCV of US$8.6 bn (including Phoenix Standard Life deal of US$2.5 bn) vs. US$6.4 bn YoY. TCS believes that the uptick in tech spend is structural and the sector is right now witnessing the start of the first phase of a multi-year technology transformation cycle. TCS has announced a share buyback (through tender offer route) of Rs160 bn at...

We recommend a BUY on TCS Ltd with a Target Price of Rs 2750, an upside of ~5% from CMP of Rs. 2611 and Stop Loss Rs 2500.

We upgrade TCS to Buy from Hold with a revised PT of Rs. 2,600, given strong earnings growth potential over FY2021-23E Company best-placed to leverage next transformation wave given early investments on tech spend areas, strong delivery model, client proximity and status as preferred digital partner of large enterprises....

While BFSI vertical revenues of Indian IT players contracted in Q1FY21, we expect a swift recovery to pre-Covid growth levels through FY21 on the back of (1) receding supply challenges and (2) steady technology budgets at large US banks.

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 Q1FY21 result, Impact of the pandemic played out broadly in line with expectations Tata Consultancy Services (TCS) for the quarter ended Jun 2020 reported a consolidated revenue of Rs 38322 crore, a fall of 4% compared to sequential previous quarter ended Mar 2020 revenue of Rs 39946 crore. Lower revenue for the quarter is largely as revenue of all...

More importantly, continued traction in large deals, a healthy pipeline, and better resilience in BFSI are encouraging Management believes the worst impact of COVID-19 is behind (both in terms of revenue and profitability) even as some variables such as pricing and working capital cycles warrant a close watch. TCS reported revenue (CC) / EBIT / PBT/ PAT declined 6.3%/2%/11%/14% As in the case of Accenture, the Healthcare vertical reported robust growth (~14% YoY, CC), led by work related to contact tracing applications, etc. Over the medium term, we expect TCS to be a key beneficiary of the COVID-19-driven increase in technology intensity across Rich multiples (22x FY22E EPS) leave limited upside in the stock, in our view. In this vertical, while the UK and Canadian markets remained soft, Barring continental Europe (+2.7% YoY), key geographies such as North America (-6.1% YoY) and the UK (-8.5% YoY) reported declines.

TCS's Q1FY21 performance was a mixed bag with a miss on operating performance but healthy deal wins.

TCS reported sluggish results in Q1FY21; revenue stood at Rs. 38,322 crs a decline of 4% QoQ and 7.1% QoQ in CC terms. Operating profit showed a de-growth of 10% QoQ at Rs. 9,048crs, while operating margin declined by 150 bps QoQ at 23.6% due to lower utilization and pricinng pressure.

TCS's Q1FY21 revenue decline of 6.9%/7.8% QoQ/YoY in CC was a miss to our forecast. EBIT margin of 23.6%, -150bps QoQ was also a miss. Further, higher than expect effective tax rate (ETR) resulted in higher miss at EPS level. In Q1, TCS has secured deals with TCV of US$6.9 bn (ex-Phoenix Standard Life deal) vs. US$5.7 bn YoY. TCS believes that the impact of Covid-19 pandemic has bottomed out in Q1FY21 and has maintained its revenue growth outlook for rest of FY21. We factor Q1FY21 miss and cut FY21E/22E revenue (US$) by 3%/2.5% and EPS by 2.6%/2.9%. We now forecast FY21 revenue to decline by 5.1% YoY and revive to a...