Jan 17, 2013 01:57 PM IST | Source:

Buy TCS; target of Rs 1491: Firstcall Research

Firstcall Research is bullish on Tata Consultancy Services (TCS) and has recommended buy rating on the stock with a target of Rs 1491 in its January 15, 2013 research report.

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Firstcall Research is bullish on Tata Consultancy Services (TCS) and has recommended buy rating on the stock with a target of Rs 1491 in its January 15, 2013 research report.
“Established in 1968, Tata Consultancy Services (TCS), a member of the Tata Group is considered as the largest IT services firm in Asia based on its record of outstanding service, collaborative partnerships, innovation and corporate responsibility. TCS Ltd. is an Indian IT services, business solutions and outsourcing company headquartered in Mumbai, India. The service is delivered through its unique Global Network Delivery Model™ (GNDM), recognized as the benchmark of excellence in software development. TCS has over 2,26,751 of the world’s best-trained consultants in 42 countries. The company has generated consolidated revenues of US $8.2 billion for year ended March 31, 2011. It is the largest provider of information technology in Asia and second largest provider of business process outsourcing services in India. TCS was ranked as the 4th most valuable brand in global IT services by Brand Finance. It was named ‘Largest Systems Integrator’ by Communication, Multimedia and Infrastructure (CMAI) Association of India. Genworth Financial, Inc. has named the company as its Strategic Supplier of the Year. It also won the prestigious 'Microsoft IT – Supplier Innovator of the Year' award.”
“TCS Ltd. is the largest software company in Asia, having a wide range of offerings and catering to industries like banking and financial services, manufacturing, telecom, and retail, reported its consolidated financial results for the quarter ended 31st December, 2012. The company’s net profit jumps to Rs.35496.20 million against Rs.24147.60 million in the corresponding quarter ending of previous year, an increase of 47.00%. Revenue for the quarter rose 48.84% to Rs.160699.30 million from Rs.107970.20 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.18.14 a share during the quarter, registering 47.00% increase over previous year period. EBITDA is Rs.162911.20 millions as against Rs.110911.60 millions in the corresponding period of the previous year.”
“At the current market price of Rs 1356, the stock P/E ratio is at 21.34 x FY13E and 18.46 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.63.55 and Rs.73.45 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 23% and 16% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 14.72 x for FY13E and 12.68 x for FY14E. Price to Book Value of the stock is expected to be at 7.29 x and 6.03 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 1491 for medium to long term investment,” says Firstcall Research report.

Non-Institutions holding more than 90% in Indian cos

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