Buy Tata Consultancy Services, target Rs 3665: Equity99

TCS | The IT major will release its March quarter scorecard on April 16. Industry experts and brokerages expect the IT major to release a subdued set of numbers. The estimates of Kotak Institutional Equities show TCS' CC (constant currency) revenue growth of 0.6 percent QoQ and 4.9 percent YoY.

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Sumit Bilgaiyan

Tata Consultancy Services has reported a beat on revenue front due to strong growth across most geographic except Americas and most verticals with revenues rising 3.9 percent QoQ and 2 percent in CC in a seasonally soft quarter.

Margins were mostly in line with forex tailwind due to variable pay and rising subcontractors. Outlook for most verticals apart from US BFS remains in double digits, led by energy, travel, lifesciences and insurance. Rising participation in larger digital implementation projects, bottoming out of BFS insourcing and strong client relationships keep TCS best positioned to capture global growth recovery.

Improving growth outlook from large deal wins, digital share gains and potential recovery in US BFS will drives TCS’ earnings. We are recommending TCS with target price of Rs 3665.