Tata Consultancy Services Ltd. share price target

Sequentially TCS registered 4% rise in consolidated sales to Rs 32075 crore for the quarter ended December 2017. OPM grew 20 basis points to 27.0% which saw OP rise 4% to Rs 8655 crore. Other income grew 14% to Rs 991 crore and interest cost grew 100% to Rs 12 crore. After providing for depreciation (Rs 506 crore against Rs 505 crore), PBT went up 6% to Rs 9129 crore. Provision for taxation grew 5% to Rs 2204 crore after which PAT grew 6% to...

Maintain NEUTRAL with TP of Rs 3,135, 19x FY20E. TCS posted growth acceleration while operating performance came in-line. Revenue came at USD 4,972mn, 3.9/11.7% QoQ/YoY led by 2.0/7.2% CC growth. FY18 revenue growth was 6.7% YoY CC (INFY at 5.8% YoY CC). EBIT margin came at 25.4%, +22bps QoQ and APAT came at Rs 69.25bn, 5.8/4.6% QoQ/YoY. Growth was led by digital (23.8% of rev) with 11.9% QoQ and legacy grew 1.6% QoQ.

TCS' business outlook is clearly better in FY19E compared to FY18. The IT major's broad-based growth and visibility across several verticals drives underlying confidence on business growth over FY18-FY20E. With Digital starting to contribute substantially, healthy growth in this segment will also move the needle more meaningfully. Among negatives, we await better revenue traction in BFSI. Nonetheless, we are enthused with the IT major's positive growth outlook and stable margin expectations. We upgrade our target PE multiple to 22x to factor in improving growth profile, and upgrade the stock to BUY from HOLD with a revised Target Price of...

Rupee revenues grew 3.8% QoQ to | 32,075 crore, above our 2.1% growth expectations of | 31,543.6 crore estimate At 25.4%, EBIT margins expanded 20 bps QoQ, marginally below our 50 bps expansion, 25.7% estimate mainly due to higher employee expenses (up 3.8% QoQ) & higher SG&A; expenses (up 2.8% QoQ) PAT of | 6,904 crore was ahead of our | 6,720 crore estimate led by...

Q4FY18 revenue growth of 3.9% QoQ (in US$) and 2% QoQ in CC was in-line with our forecast. EBIT margin improvement of 22bps QoQ to 25.4% was slightly lower than our forecast. However, EPS of Rs36.1, +5.7% QoQ was in-line. TCS has...

million) on sequential basis in the history of Q4, despite seasonality issues. Revenue growth was driven by strong performance in verticals such as energy & utilities and travel & hospitality along with geographies in Europe and APAC (Japan grew in double digits). TCS reported a higher-than-expected constant currency (CC) revenue growth of 2% QoQ in Q4FY18, led...

TCS delivered 24.8% EBIT margin in FY18, and 25.5% excluding the impact from currencies. Marginally below its aspired band of 26-28%, EBIT margin is guided to get back into that range (however, TCS refrained from guiding for the same for FY19). The key levers at the company's disposal for the same are: (i) an improvement in the larger industries, such as BFS and Retail in North America, which is expected to drive overall revenue growth revival and (ii) an increasing scale of operations in Digital, providing more room for optimization within the segment.

View: We maintain Tata Consultancy Services (TCS) as our preferred pick among the Tier-I IT Services companies. Given the recent run-up in Technology stocks, we believe that the valuations are now stretched for certain companies as we do not see a meaningful fundamental recovery in growth prospects for FY19. We continue to remain selective in our approach and maintain TCS as our preferred pick among Tier-I IT Services plays. In our opinion, the recent rally offers a good opportunity to exit some of the names such as Infosys, as its discount to TCS would widen further from the current level of 10% to the ideal range of...

Tata Consultancy Services Ltd Q3FY18 results comment Revenue rose by 1.19% to Rs. 30904.0 Cr in Q3FY18 when compared to the previous quarter

Q3FY18 operating performance was a marginal miss on revenue and margin fronts. Revenue growth at 1% QoQ in USD terms was a narrow miss to street/ our expectations. Growth was driven by strong momentum in Retail (up 6% QoQ) and Energy & Utilities (up 8.5%).