Tata Consultancy Services Ltd. share price target

TCS registered 4% rise in consolidated sales to Rs 30904 crore for the quarter ended December 2017. Constant Currency revenue grew 6.2% Y-o-Y and 1.3% Q-o-Q. The company saw strongest Volume growth for Dec. qtr in 3 years. OPM fell 90 basis points from 27.7% to 26.8% which saw OP rise 1% to Rs 8287 crore. Other income fell 27% to Rs 870 crore and interest cost fell 14% to Rs 6 crore. After providing for depreciation (up 2% to Rs 506 crore), PBT went down 3% to Rs 8645 crore. Provision for taxation remained same at Rs 2100 crore after which PAT fell 4% to Rs 6545 crore. Minority interest (MI) fell 61% to Rs 14 crore. Thus net profit went down 4% to Rs 6531 crore....

TCS posted a 1.0% sequential growth in USD revenues to US$4,787mn v/s US$4,801mn expected. In rupee terms, revenues came in at `30,904cr V/s `31,049cr, up 1.2% QoQ. In Constant Currency (CC) terms, the company posted a 1.3% QoQ growth with volume growth coming in at 1.6% QoQ (highest growth in three years for the December quarter). On pro..

Maintain NEUTRAL with TP of Rs 2,705, 17x FY20E EPS (Dec-19E earlier). TCS posted in-line quarter with revenue growth at 1.3% QoQ CC and flat EBIT margin of 25.2%, +10bps QoQ. Key positives for the quarter were (1) Strong digital (22.1% of rev) performance with digital crossing USD 1bn quarterly revenue mark and a large digital deal win, (2) Rebound in the Retail & CPG vertical (12.5% of rev) which grew 6.4% QoQ (following three declining qtrs out of the prior six), and (3) Large deal wins (Transamerica, Nielsen) and steady client metrics.

ICICI Securities Ltd | Retail Equity Research US$ revenues grew 1% QoQ to $4,787 million, marginally below our 1.5% QoQ growth and $4,811.4 million estimate. Constant currency revenues grew 1.3% QoQ led by volume growth (1.6% QoQ) Rupee revenues grew 1.2% QoQ to | 30,904 crore, below our estimate of 1.9% growth to | 31,135 crore At 25.2%, EBIT margins expanded 10 bps QoQ and were in line with our 25.2% estimate mainly on account of lower SG&A; (16.7% as a...

BFSI Continues to Witness Headwinds; Retail Outperforms Tata Consultancy Services (TCS) has reported an in-line performance in 3QFY18, with its USD revenue growing by 1% QoQ (1.3% in CC terms). While volume grew by 1.6% QoQ, CC pricing marginally declined by 0.3% QoQ. Led by operational efficiency in a seasonally weak quarter, its EBIT margin rose by 10bps QoQ. Net profit rose by 1.3% QoQ to Rs65.3bn. From vertical perspective, revenue from the key BFSI vertical that continues to witness headwinds declined by 1.7% QoQ. However, on a positive note, the Retail vertical staged a strong recovery, with revenue growing by 6.1% QoQ. Notably, the Management expects this vertical to clock...

Digital solutions saw a massive 39.6%% YoY and 13.9% QoQ growth. TCS confirmed that it is seeing larger deals in Digital solutions. Out of the 11 large deals secured in Q3FY18, at least 50% are business transformation deals. We increase our FY19 revenue forecast by 1.5%. We introduce FY20 financials and forecast revenue (in US$) to grow at a CAGR of 11.2% over FY18-20 post an 8.1% growth in FY18. We forecast EPS to grow at a CAGR of 13.2% over FY18-20E. We upgrade TCS to ACCUMULATE with a new street-high TP of Rs3,102 based on PER of...

After declining for three quarters (YoY CC), Retail recovered with 3% YoY CC growth, and TCS expects this to reach double-digits in FY19, a key positive from its 3Q earnings. However, 1.5% QoQ CC decline in BFSI (flat YoY CC), and limited likelihood of this rebounding in the next few quarters offset the strength in Retail. Add to that profitability risk that current levels of INR-USD bear, and the overhang to earnings from potentially greater taxation liability arising out of BEAT, we remain subdued on the near-to-medium-term triggers for TCS. TCS' 3QFY18 CC revenue growth was 1.3% QoQ, marginally ahead of our estimate of +0.9%. 9M YoY CC growth stands at 6.4%, compared to 6.2% in this quarter. EBIT margin expanded 10bp QoQ to 25.2%, as against our estimate of a 20bp contraction. PAT increased 1.3% QoQ, but fell 3.6% YoY to INR65.3b (2% beat).

TCS result is largely in line with our estimate, driven by a strong traction in Digital revenue (up by 14% qoq). At 25.2% (up 10bps qoq), OPM is slightly better than our estimate, spurred by robust volume and cost efficiency. Digital revenue accounts for 22% of total revenue and is growing at 30% on TTM basis, with revenue of over US$3.3bn. The traction is driven by broadening as well as...

TCS reported 3QFY18 revenue growth broadly in-line with the moderated expectations; outlook was sanguine with a strong deal closure during the quarter + a healthy pipeline. Still, we expect FY19 USD revenue growth could remain in the 7-8% band, same as FY18, given the continued softness in BFS vertical (c25% of revenues, JMFe). Further, the profile of the incremental revenues + a strong INR should keep the margins around current levels. Thus, our operative assumptions and forecasts are largely unchanged; changes in the US taxation...

For 2QFY2018, TCS posted above expectation results on the EBIT and net profit fronts. The company posted 3.2% sequential growth in USD revenues to US$4,739mn v/s. US$4,738mn expected, mostly driven by volume (3.2% qoq growth). In Constant Currency (CC) terms, the company posted a 1.7% qoq growth. EBIT margins came in at 25.1% v/s. 24.1% e..