Tata Consultancy Services Ltd. share price target

TCS posted numbers slightly better than expected for 3QFY2017 on the sales and EBIT front. The company reported a 0.3% sequential growth in USD revenues to US$4,387mn v/s US$4,383mn expected. On Constant Currency (CC) terms, the growth came in at 2.0%. Volume growth during the quarter came in at 1.0% qoq. On EBIT front, the company record..

Background: TCS pioneered IT services exports & is India's largest IT services exporter. In 3QFY17; Geography Split: North + Latin America: 57.2%, Europe: 24.4%, India: 6.3% and ROW: 12.1%. Revenue Mix: ADM: 37.2%, Enterprise Solutions: 17.5%, Assurance Services: 9.0%, Engineering & Industrial: 4.9%, Infra Services: 16.8%, Asset Leverage Solutions: 3.0%, BPO: 11.6%. Verticals mix: BFSI: 40.4%, Communication & Media: 10.6%, Retail& CPG: 13.5%, Manufacturing & HI-TECH: 16.0%, Life Sciences: 7.4%, Travel: 3.8%,...

TCS 3Q was marked by skewed growth (yet nearly in-line on aggregate basis) and a big shuffle at the top (will increase operational rigour). India/LatAm and IMS/product lines drove the show, with digital growth along expected lines (30% YoY spread across, even as legacy crawled at 2% YoY).

ICICI Securities Ltd | Retail Equity Research US$ revenues grew 0.3% QoQ to $4,387 million, below our 1.0% growth and $4,418 million estimate. Constant currency (CC) revenues...

Good Quarter, but Top-level Rejig a Headwind Tata Consultancy Services (TCS) has delivered decent performance in a seasonally weak quarter with its USD revenue growing by 0.3% qoq (2% qoq in CC terms) in 3QFY17, which has topped our estimate by 0.3%. EBIT margin remained flat (albeit 30bps above our estimate), while net profit rose 2.9% qoq (4.9% above our estimate). However, we envisage the appointment of N Chandrasekaran as Chairman of Tata Sons following the ouster of Cyrus Mistry in Oct'16 as a key challenge for TCS now. Mr. Rajesh Gopinathan, CFO, has been elevated as CEO& MD, while Mr. NG...

Q3FY17 revenue growth of 2% QoQ (in constant currency - CC) and was slightly higher than our forecast of +1.2%. EBIT margin being maintained at 26% was in-line with our forecast. EPS of Rs34.4, +3%/+11% QoQ/YoY, was ~6% higher than our forecast, aided by FX gains. TCS expect changes in the visa policy in the US but is confident of maintaining its EBIT margin band of 26%-28% in the long-term. TCS's current MD and CEO N Chandrasekaran would take over as the Chairman of Tata Sons from 21 February, 2017. It's CFO Rajesh Gopinathan would be the new MD and CEO. Additionally,...

TCS has announced its 2QFY2017 results and has posted a 0.3% sequential growth in USD revenues to US$4,374mn (V/s US $4,441mn expected). Though the results came in below expectations, the EBIT margins and net profit came in much higher than expected. The constant currency (CC) growth stands at 1.0% qoq, while the volume growth is at 1.3% ..

Q2FY17 revenue growth of 1% QoQ (in constant currency - CC) and 0.3% (in US$) missed our forecast of a 3% growth in CC. However, EBIT margin of 26%, +90bps QoQ, beat our forecast of 25.6%. EPS of Rs33.4, +4%/+9% QoQ/YoY, was ~4% higher than our forecast. The revenue miss was mainly on account of a 3.1% QoQ decline in the Retail and CPG vertical (13.4% of revenue), which was a negative surprise for TCS. This also impacted the growth in Digital solutions which grew at 1.5% QoQ and now contribute 16.1% to total revenue. India business (5.8% of revenue) declined by 7.6% QoQ due to spill-over of revenue worth ~US$27m (0.6% of Q2FY17 revenue) to Q3FY17....

TCS muted revenue performance was offset by execution improvement in 2Q, with EBIT% recouping towards the lower margin band of 26-28% which is sustainable (increasing fresher share in hiring-mix). Acceleration in digital is vital (digital at 16.1% of 2Q revenue & 27% YoY) with persistent challenges of technology disruption and limited pricing power in legacy services (2% YoY in 2Q and 3% YoY in 1HFY17).

Background: TCS pioneered IT services exports & is India's largest IT services exporter. In 2QFY17; Geography Split: America: 54.5%, Europe: 27.2%, India: 6.5% and ROW: 11.8%. Revenue Mix: ADM: 40.0%, Enterprise Solutions: 17.5%, Assurance Services: 8.7%, Engineering & Industrial: 4.5%, Infra Services: 14.7%, Asset Leverage Solutions: 3.2%, BPO: 11.4%. Verticals mix: BFSI: 40.5%, Communication & Media: 10.8%, Retail& CPG: 14.1%, Manufacturing & HI-TECH: 15.4%, Life Sciences: 7.0%,...