Time period given by analyst is one year when Tata Consultancy Services Ltd. price can reach defined target.
Tata Consultancy Services Ltd., incorporated in the year 1995, is a Large Cap company (having a market cap of Rs 1455817.15 Crore) operating in IT Software sector.
Tata Consultancy Services Ltd. key Products/Revenue Segments include Consultancy Income and Sale of Equipment & Software Licences for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 47978.00 Crore, up 4.00 % from last quarter Total Income of Rs 46132.00 Crore and up 16.88 % from last year same quarter Total Income of Rs 41049.00 Crore. Company reported net profit after tax of Rs 9653.00 Crore in latest quarter.
Investment Rationale
The brokerage maintains ADD on TCS despite a slight miss on revenue and margin, supported by healthy deal wins (book-to-bill of 1.2x was similar to Accenture outsourcing). TCS continues to witness strength in its core business segment and has bagged higher mid-sized deals spread across verticals. The brokerage expects the growth to continue, supported by (1) strong demand environment, led by a secular shift to cloud, (2) growth pick-up in Europe, led by BFSI, (3) continued strong deal wins in retail & CPG vertical and recovery in manufacturing, and (4) +25% YoY (excluding mega-deal) growth in TCV, led by TCS Cognix. The ongoing supply side crunch (attrition increased to 11.9%, yet industry-best) and return of discretionary spend will limit margin expansion despite operating leverage and higher pricing. The target price of INR 4,180 is based on 32x Dec-23E EPS with EPS CAGR of 14% over FY21-24E.
Promoter/FII Holdings
Promoters held 72.2 per cent stake in the company as of March 31, 2021, while FIIs held 15.6 per cent, DIIs 7.9 per cent and public & others 4.3 per cent.
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