Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

ADD on Tata Consultancy Services - Strong progression - HDFC Securities

Posted On: 2021-04-13 09:05:23 (Time Zone: Arizona, USA)


Mr. Apurva Prasad, Institutional Research Analyst, HDFC Securities and Mr. Amit Chandra, Institutional Research Analyst, HDFC Securities

We maintain ADD on TCS, following a strong 4Q performance, robust growth indicators, and positive commentary (3-5 years structural growth drivers). The near-term growth visibility is high, supported by strong bookings (4Q book-to-bill higher than FY20 and 9MFY21 book-to-bill) and higher mix of smaller deals. We believe TCS' calibrated focus on upstream/consulting business will increase its addressable market. The industry-leading execution continues with markers such as decline in attrition (though uptick in sub-con), reversion to normal wage cycle, and investments in up-skilling (enabling partnerships, solution expertise). TCS' commentary on supply-side (no concerns) was a contrast to Accenture's commentary (reversion of attrition to pre-COVID level), and we believe that the uptick in demand will increase the attrition differential within the sector. Core verticals look healthy with strong bookings in BFSI and Retail & CPG (both in value and volume terms). Our target price of INR 3,470 is based on 28x Mar-23E EPS with EPS CAGR at 17% over FY21-23E.

4QFY21 highlights: (1) Revenue came at the highest ever 4Q in the past ten years at 4.2% QoQ CC (5.9% YoY). (2) EBIT margin hit a 22-quarter high at 26.8%, +23bps QoQ supported by higher gross margin, offset by higher sub-con. (3) Net addition was robust in 4Q at 19,388. (4) BFSI and Retail & CPG verticals grew 7% QoQ and 4% QoQ in CC terms, supported by ramp-up of large deal wins and strong bookings during the quarter. (5) Deal TCV of USD 9.2bn (book-to-bill 1.54x) included NorthAm bookings at USD 4.2bn, BFSI bookings at USD 3.9bn, and Retail & CPG bookings at USD 4.2bn.

Outlook: Accelerated cloud adoption, vendor consolidation, and uptick in transformational deals will support the flight to quality. We have factored in USD revenue growth of 15.9%/10.9% for FY22/23E with 1QFY22 at 3.1% QoQ. EBIT margin for TCS is factored in at 26.4%/27.5% for FY22/23E. Valuations are at 30.4/26.2x with FY21-23E EPS CAGR at 17%.

Shares of TATA CONSULTANCY SERVICES LTD. was last trading in BSE at Rs.3105 as compared to the previous close of Rs. 3241.45. The total number of shares traded during the day was 247729 in over 21983 trades.

The stock hit an intraday high of Rs. 3230 and intraday low of 3074.55. The net turnover during the day was Rs. 771803291.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.


Other Headlines:

Maintain BUY on Ashoka Buildcon - Q4FY21 Monetisation awaited - HDFC Securities

Oil India Results Report - BUY Recommendation - Realisation drives profitability - HDFC Securities

Federal Bank Annual Report Analysis - New guardrails under construction for new profit pools - HDFC Securities

GE Power India - Healthy execution, focus towards services - ICICI Securities

NMDC - Lower than expected royalty incidence drives beat - ICICI Securities

TTK Prestige - E-commerce & rural to drive growth - ICICI Securities

Avanti Feeds - Higher shrimp feed sales augur well for shrimp exports - ICICI Securities

Bharat Electronics - Order inflow and execution continue to impress - ICICI Securities

Ashoka Buildcon - Q4FY21 Order wins crucial going ahead - ICICI Securities

Credit cards - Covid 2.0 impact relatively lower; June witnesses recovery - ICICI Securities

IPO Review - India Pesticides Ltd - ICICI Direct

Q4FY21 Result Update - Ashoka Buildcon - ICICI Direct

Q4FY21 Company Update - MM Forgings - ICICI Direct

Oil India Ltd - Q4 FY21 Result Report - YES Securities

Info Edge (India) Ltd - Q4 FY21 Result Report - YES Securities

TCNS Clothing - Q4FY21 - Focus back to growth - ICICI Securities

Info Edge - Surprisingly strong outlook notwithstanding 2nd wave - ICICI Securities

Oil India - Surge in oil price to drive strong rebound - ICICI Securities

Q4FY21 Result Update - Info Edge (India) - ICICI Direct

Company Update - TCNS Clothing - ICICI Direct

InfoEdge - Q4FY21 First Cut - ICICI Direct

Maintain BUY on PSP Projects - Q4FY21 - In-line quarter - HDFC Securities

NTPC Q4FY21 Results Review Report - Strong show in a challenging environment - HDFC Securities

Maintain BUY on Power Grid Corporation of India (PGCIL) - Well poised to seize upcoming opportunities - HDFC Securities

Maintain REDUCE on Indostar Capital Finance - Stress yet to subside; balance sheet yet to stabilise - HDFC Securities

PSP Projects - Q4 FY21 Result Update - YES Securities

HDFC Life Insurance Company - Well placed to benefit from strong demand outlook - ICICI Securities

NTPC - Operationally strong, higher dividend; RE target doubled - ICICI Securities

Insecticides India - Revenue mix improvement expands margins - ICICI Securities

Havells India - Annual report analysis: Higher focus on rural and digital - ICICI Securities

HealthCare Global Enterprises - Growth momentum to continue - ICICI Securities

Natco Pharma - Weak quarter; set for strong FY22 - ICICI Securities

Analyst Meet Update - Zensar Technologies - ICICI Direct

Analyst Meet Update - Time Technoplast - ICICI Direct

Q4FY21 Result Update - Natco Pharma - ICICI Direct

Ashoka Buildcon - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Coal India - ICICI Direct

Timken India - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Cochin Shipyard - ICICI Direct

NTPC - Q4FY21 First Cut - ICICI Direct

CESC Q4FY21 Results Review Report - Loss decline, strong CF make valuation attractive - HDFC Securities

White Goods & Durables - Analysis of pressure cooker market: TTK Prestige is key beneficiary - ICICI Securities

CESC - Good earnings in a challenging environment - ICICI Securities

Somany Ceramics - Walking the talk - ICICI Securities

DB Corp - Rise in newsprint price adds to risk - ICICI Securities

CEAT - Market share ambitions remain strong - ICICI Securities

Consumer Staples & Discretionary - Worm's world view #32: Conversations with paint dealers regarding price hikes - ICICI Securities

Oil & Gas - Oil, gas & spot LNG surge to bring gains for GAIL & OIL - ICICI Securities

Asset Management Companies - Positive trends to support earnings - ICICI Securities

Q4FY21 Result Update - Lemon Tree Hotels - ICICI Direct


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020