Tata Consultancy Services Ltd. share price target

TCS in its pre-quarterly analyst meet on Thursday has said 4QFY15 USD revenue growth is likely to get adversely impacted by 200bps owing to adverse cross-currency movements and USD appreciation against the EUR, GBP and AUD, while INR appreciation is likely to have an even bigger impact of 275bps on CC revenue growth. IT budgets thus far have seen a slow start to CY15.

Background: Started in 1968, TCS pioneered IT services exports & is India's largest exporter (FY14 rev: INR 818bn, 300,464 people). Revenue Split: North America 55.3%, Europe - 28.7%, ROW - 15.9%. Services Mix: ADM - 41.6%, Enterprise Soln - 15.5%, Assurance Services - 8.4%, Engg, Indl - 4.7%, Infra Services - 11.9%, Global Consulting - 3.4%, Asset Lev Solns - 2.5%, BPO - 12%. Verticals mix: BFSI -42.9%, Telecom - 9.5%, Retail - 13.8%, Manufacturing - 8.5%, Hi-Tech-5.4%, Life Sciences - 5.8%, Travel - 3.4%, Energy - 3.8%, Media-2.3% Others - 4.6%. USD 100mn+ clients: 24.Fixed Price Contracts accounts for 48%. Utilisation (ex.trainees)...

Background: Started in 1968, TCS pioneered IT services exports & is India's largest exporter (FY14 rev: INR 818bn, 300,464 people). Revenue Split: North America 55.3%, Europe - 28.7%, ROW - 15.9%. Services Mix: ADM - 41.6%, Enterprise Soln - 15.5%, Assurance Services - 8.4%, Engg, Indl - 4.7%, Infra Services - 11.9%, Global Consulting - 3.4%, Asset Lev Solns - 2.5%, BPO - 12%. Verticals mix: BFSI -42.9%, Telecom - 9.5%, Retail - 13.8%, Manufacturing - 8.5%, Hi-Tech-5.4%, Life Sciences - 5.8%, Travel - 3.4%, Energy - 3.8%, Media-2.3% Others - 4.6%. USD 100mn+ clients: 24.Fixed Price Contracts accounts for 48%. Utilisation (ex.trainees)...

Background: Started in 1968, TCS pioneered IT services exports & is India's largest exporter (FY14 rev: INR 818bn, 300,464 people). Revenue Split: North America 55.3%, Europe - 28.7%, ROW - 15.9%. Services Mix: ADM - 41.6%, Enterprise Soln - 15.5%, Assurance Services - 8.4%, Engg, Indl - 4.7%, Infra Services - 11.9%, Global Consulting - 3.4%, Asset Lev Solns - 2.5%, BPO - 12%. Verticals mix: BFSI -42.9%, Telecom - 9.5%, Retail - 13.8%, Manufacturing - 8.5%, Hi-Tech-5.4%, Life Sciences - 5.8%, Travel - 3.4%, Energy - 3.8%, Media-2.3% Others - 4.6%. USD 100mn+ clients: 24.Fixed Price Contracts accounts for 48%. Utilisation (ex.trainees)...

Background: Started in 1968, TCS pioneered IT services exports & is India's largest exporter (FY14 rev: INR 818bn, 300,464 people). Revenue Split: North America 55.3%, Europe - 28.7%, ROW - 15.9%. Servic es Mix: ADM - 41.6%, Enterprise Soln - 15.5%, Assurance Services - 8.4%, Engg, Indl - 4.7%, Infra Services - 11.9%, Global Consulting - 3.4%, Asset Lev Solns - 2.5%, BPO - 12%. Vertic als mix: BFSI -42.9%, Telecom - 9.5%, Retail - 13.8%, Manufacturing - 8.5%, Hi-Tech-5.4%, Lif e Sciences - 5.8%, Travel - 3.4%, Energy - 3.8%, Media-2.3% Others - 4.6%. USD 100mn+ clients: 24.Fixed Price Contracts accounts for 48%. Utilisation (ex.trainees)...

Background: Started in 1968, TCS pioneered IT services exports & is India's largest exporter (FY13 rev: INR 630bn, 276,196 people). Revenue Split: North America 55.6%, Europe - 26.2%, ROW - 18.2%. Servic es Mix: ADM - 42.4%, Enterprise Soln - 15.5%, Assurance Services - 7.8%, Engg, Indl - 4.6%, Infra Services - 12.1%, Global Consulting - 3.1%, Asset Lev Solns - 2.5%, BPO - 12%. Vertic als mix: BFSI -43.5%, Telecom - 9.3%, Retail - 13.4%, Manufacturing - 8.5%, Hi-Tech-5.7%, Lif e Sciences - 5.1%, Travel - 3.4%, Energy - 3.8%, Others - 5.2%. Active clients - 1065.Fixed Price Contracts accounts for 47.3%. Utilisation (ex.trainees) was at 82% &...

Volumes growth stood at 7.3% QoQ, much, stronger than the 3.1% QoQ volume growth by Infosys , led by Americas and Europe. The management sees good traction in annuity, traditional and transformational businesses. Deal sizes and discretionary spends are improving in US. Most key verticals, including telecom, posted robust growth. BFSI segment grew 5.7% QoQ, the strongest in recent quarters, while manufacturing grew by 5.4% and retail grew by 4.7%. Among geographies, Norther America grew 4% QoQ, while Europe and UK grew 7%. Amongst service lines, ADM grew by...

Revenues grew 4.1% QoQ to USD 3.17bn with volume growth coming in at a robust 6.1%. While blended pricing declined by 1.3% in Constant Currency terms, cross currency headwinds adversely affected pricing by 70 bps QoQ. Most of the key verticals, including telecom, showed growth. BFSI grew by 3% QoQ, while manufacturing and retail grew by 3% & 9% QoQ, respectively. Telecom grew by 7% QoQ. Amongst geographies, North America grew by 6% QoQ while Europe and UK grew by 5% and 9% respectively. ADM grew 4% QoQ, testing by 8% and consulting growth was 18% QoQ. Adj EBITDA Margins down 60 bps QoQ at 28.7%, despite wage hikes Adj EBITDA margins came in 70bps above consensus at 28.7%, despite full wage hike implementation...

Revenues grew 3.1% QoQ to USD 3.04bn (India contributed to 50% of incremental revenues) with volume growth coming in at a robust 4.4%. Cross currency movement adversely affected pricing by 177 bps QoQ. Services with high growth include IMS (up 33.6% YoY, 6.6% QoQ) and Enterprise Solutions (up 17.1% YoY, 5.9% QoQ). Amongst verticals Manufacturing (up 18.3% YoY, 4.3% QoQ) and Retail (up 23.1% YoY, 3.1% QoQ) were the main contributors. Adj EBITDA Margins at 29.3%, up 30 bps Adj EBITDA margins surprised by improving 30 bps to 29.3% led by employee productivity gains of 94 bps QoQ in spite of an adverse cross currency impact of 64 bps QoQ. Utilisation (excluding trainees)...

Revenues grew 14% YoY and 3.3% QoQ to USD 2.95bn, led by volume growth of 1.3% QoQ, pricing improvement of 1.3% QoQ and 0.7% of cross currency gains. India grew faster at 5% QoQ than the International business which grew at 3%. Geographic growth was well distributed and most verticals, barring telecom, delivered good growth. Among horizontals, Consulting surprised by growing 10% QoQ and Infra Services growth was at 6% QoQ. EBITDA Margins surprises by increasing 59 bps in seasonally weak quarter Valuation Summary (INR bn)-Consensus Est EBITDA margins came in at 29%, up 59 bps sequentially aided by tight cost controls (non employee...