KR Choksey's research report on TCS
The company reported strong set of number in Q4 FY18, the revenues growth of 3.8% was largely supported by volume that grew by 2% qoq, however, the realization growth remained flat during the quarter. In BFSI the company has witnessed strong growth in Europe and other regions. Over the last few quarters, the budget allocation for clients (US Region) had been declining especially on BFS amidst increase in spending through captives and in-house implementation. The management has guided that the BFS in North America is expected to see a strong revival in FY19 owing to better visibility of investment plans for top-clients and greater adoption of Blockchain, Digital and Analytics.
Outlook
The stock is currently trading at 21.8x/20x in FY19E and FY20E. We assign an “Accumulate” rating on the stock and we assign multiple of 21x to its FY20E EPS of INR. 159.8 to arrive at a price target of INR 3,357.
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