Investments in Indian Equity and Research > Sensex and Nifty Company Analysis

TCS - Research Recommendation

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resh:
Ashwin Mehta and Vamsi Krishna of Ambit Capital Views on TCS,

We remain below consensus on growth/margins and see risks to consensus margins on supply-side pressures and discretionary cost reversals. Broad-based growth underperformance versus Infosys/Accenture over 11-12 quarters and TCS not being immune to sectoral growth/margin moderation do not justify current valuation premiums. Stock valuations of 28.4x 1-year forward P/E imply USD revenue CAGR of 11.7% at average EBIT margin of 24.5%. Lower TP to Rs2,865 (vs Rs2,950 earlier), implying ~23x 1-year forward EPS upto Jun-24E of Rs124.7. Target Price Rs 2865

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