Tata Consultancy Services Ltd. share price target

Background: TCS pioneered IT services exports & is India's largest IT services exporter. In 1QFY17; Geography Split: America: 55.5%, Europe: 26.3%, India: 6.2% and ROW: 12.0%. Revenue Mix: ADM: 38.5%, Enterprise Solutions: 17.7%, Assurance Services: 8.8%, Engineering & Industrial: 4.8%, Infra Services: 15.5%, Asset Leverage Solutions: 3.2%, BPO: 11.5%. Verticals mix: BFSI: 40.4%, Communication & Media:...

After several quarters of disappointment, TCS delivered a solid 1QFY17. USD revenue rose 3.7% QoQ at US$ 4,362mn, EBIT margin was 59bps above estimate; growth was broad-based, an encouraging factor. YoY growth improved for the 2nd successive quarter. Management is not seeing any major headwinds in any market...

Growth acceleration thwarted by BFSI…: TCS’ 1QFY17 constant currency growth of 3.1% QoQ was marginally below our estimate of 3.9% QoQ. While the performance was broad-based, BFSI growth of 1.7% QoQ CC lagged remaining business, driven by an uncertain macro. TCS admitted that there is limited clarity on what impact Brexit could have going forward on BFSI. Motilal Oswal target price of INR2,650 discounts FY18 EPS by 17x, and implies 5% upside. Maintain Neutral.

Trendlyne has 18 reports on TCS updated in the last year from 7 brokers with an average target of Rs 2709.7. Brokers have a rating for TCS with 6 price upgrades in past 6 months and 8 price upgrades,5 price downgrades,2 downgrades and 1 upgrades in past 1 Year.

For 4QFY2016, TCS posted revenue of US$4,207mn (V/s US$4,215mn expected), up 1.5% qoq. The growth was mostly volume led, which grew by 3.2% qoq. In constant currency (CC) terms, the company posted a qoq revenue growth of 2.1%. In rupee terms, revenues grew by 4.0% qoq to Rs28,448cr (V/s Rs28,454cr expected), led by rupee depreciation. The..

TCS 4QFY16 showing justifies our NEUTRAL stance. Expectations were moderate this time, and the IT major barely exceeded them. Therefore, client additions across buckets (3 in US$ 100mn), seven large deal wins, rising digital revenue (15.5% of revenue; grew 52.2% YoY in FY16) and strength in core verticals (BFS) and geography (US) didn?t bring much cheer.

Background: TCS pioneered IT services exports & is India's largest IT services exporter. In 4QFY16; Geography Split: America: 56.0%, Europe: 26.1%, India: 5.9% and ROW: 12.0%. Revenue Mix: ADM: 39.4%, Enterprise Solutions: 3.2%, Assurance Services: 8.8%, Engineering & Industrial: 4.7%, Infra Services: 15.2%, Asset Leverage Solutions: 3.2%, BPO: 11.6%. Verticals mix: BFSI: 40.9%, Telecom: 8.3%, Retail: 14.1%,...

CC growth of 2.1% implying cross currency impact of 60bps; Volumes grew 3.2% qoq. Verticals: BFSI grew by 2.6% and Manufacturing by 4.9%. Healthcare, Retail and E&U; grew by 1.9% QoQ. Telecom reported 0.7% muted growth....

TCS' 4Q revenue came in-line with estimates with positives such as core geo growth (87% of incremental revenue from NorthAm) and core vertical (60% of incremental revenue from BFSI). We believe that digital services will continue to disproportionately drive growth for TCS, which contributed >70% to TCS' incremental growth in FY16. We believe that operating margin will continue near the lower-band with continued investments in digital. Based on 1) strength in BFSI vertical, 2) strong demand in digital services, 3) robust client metrics and 4) milder...

4QFY16 margin decline subdued stable revenue performance: TCS' 4QFY16 EBIT margin of 26.1% was the weakest margin in the last ~7 years (27 quarters), and more importantly, precedes the quarter of impending wage...

We attended the Analyst day at TCS, and came back impressed with the company's investments on the Digital front, with capabilities demonstrated aptly through its use cases in key verticals like:[1] BFSI (frictionless payments,...