Buy Tata Consultancy Services; target of Rs 3610: Anand Rathi

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26 Aug, 2025 12:21

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Anand Rathi's research report on Tata Consultancy Services

Tata Consultancy Services Ltd. reported consolidated revenues of RS.437,050 million in Q4FY21, up by 9.4% year over year (y/y) and 4.1% quarter on quarter (q/q) led by strong growth across all verticals and geographies. This healthy growth in the top-line is also supported by the strong demand in core transformation services and strong revenue conversion from earlier deals. All verticals showed good sequential growth, BFSI (+7% QoQ, +13.3% YoY), Retail and CPG (+4% QoQ, -0.9% YoY), Life Sciences and Healthcare (+3.8% QoQ, +19.3% YoY), Manufacturing (+3.9% QoQ, +1.3% YoY) and Technology & Services (+2.8% QoQ, +3.9% YoY). On a geographical front, North America (51% of revenue) improved by 3.9% QoQ, Europe (32% of revenue) grew by 5.9% QoQ, India business grew by 2.8% QoQ in CC terms. Overall TCV of deals won during 4QFY21 was at a record high of USD9.2b compared to USD8.9b in 4QFY20. The deal wins are also broad-based participation across verticals and geographies. Of the total TCV, North America accounted for US$2.4 billion among geographies while vertically $3.9 billion was from in BFSI and US$1.4 billion in retail. As per management, strong outlook for BFSI vertical (strongest-ever BFSI deal bookings), investments in hyper-scalers units and improving supply-side metrics, could help the Company to post double digit growth in the year ended March 2022.

Outlook

With continuity of robust growth across segments, we expect the growth momentum to continue in the medium term supported by strong deal pipeline and ramp up of large deals. We maintain our Buy rating on the stock with an upward revised target price of RS.3,610 per share.

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