Tata Consultancy Services Ltd - Soft quarter as expected, upping to ACCUMULATE - Emkay

Reco: ACCUMULATE
CMP: Rs 2196
Target Price: Rs 2400

- 1.9% QoQ US$ revenue growth tad lighter than street expectations of 2-2.5% QoQ. Margins inline with expectations. Higher other income drive slight profit beat

- Headcount addition remains strong. Strong traction in Continental Europe continues with a 6.3% QoQ growth. Company wins 9 large deals spread across verticals

- Management remains confident of FY15 being better than FY14' and expects the seasonal strength in H1 to prevail. Company continues to expect uptick in discretionary spending in key markets

- Tweak FY15/16E EPS to ~Rs 114/126. Upgrade TCS to ACCUMULATE, TP Rs 2,400 given recent underperformance. Recommend adding positions on any near term weakness

Source : Equity Bulls

Keywords