Buy Tata Consultancy Services; target of Rs 4150: Emkay Global Financial

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26 Aug, 2025 12:21

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Emkay Global Financial's report on Tata Consultancy Services

Q3FY22 revenue exceeded our expectation, while EBITM missed the estimate. Revenue grew 3.9%/15.4% QoQ/YoY in CC terms. EBITM declined by ~60bps QoQ to 25%, due to an increase in compensation costs, higher subcontracting expenses and discretionary non-manpower costs. Revenue growth was broad-based, and all verticals posted double-digit CC growth YoY. Growth was led by Retail & CPG (20.4% CC YoY), Manufacturing (18.3%), BFSI (17.9%), Technology & Services (17.7%) and Life Sciences & Healthcare (16.3%). All geographies, except for Asia Pacific and MEA, posted double-digit growth YoY. A strong and sustained demand environment, broad-based growth, healthy deal intake (USD23.3bn in 9MFY22), and traction in cloud, IoT and Digital engineering give management confidence to sustain a robust revenue growth trajectory.

Outlook

We tweak our FY22/23/24 EPS estimates by -1.5%/0.5%/0.2% after factoring in the Q3 performance and buyback. We maintain Buy with a TP of Rs 4,150 (Rs4,100 earlier) at 30x Dec'23E EPS, considering steady deal wins and consistent execution.

More Info

At 17:30 Tata Consultancy Services was quoting at Rs 3,897.65, up Rs 40.40, or 1.05 percent.

It has touched an intraday high of Rs 3,944.40 and an intraday low of Rs 3,857.25.

It was trading with volumes of 368,315 shares, compared to its thirty day average of 103,347 shares, an increase of 256.39 percent.

In the previous trading session, the share closed down 1.50 percent or Rs 58.55 at Rs 3,857.25.

The share touched its 52-week high Rs 3,990.00 and 52-week low Rs 2,701.00 on 08 October, 2021 and 24 February, 2021, respectively.

Currently, it is trading 2.31 percent below its 52-week high and 44.3 percent above its 52-week low.

Market capitalisation stands at Rs 1,441,760.76 crore.For all recommendations report, click here

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