Anand Rathi's research report on Tata Consultancy Services
Tata Consultancy Services Limited (TCS) reported good growth in topline in line with our expectations with revenue from operation growing 15.8% YoY to Rs. 505.9 billion during 4QFY22 as against Rs. 437.1 billion in 4QFY21. The company recorded Constant Currency Revenue growth of 14.3% YoY. The Company recorded revenue at Rs. 1,917.5 billion for FY22, a growth of 16.8%. The company reported EBITDA of Rs. 138.5 billion in 4QFY22 as against Rs. 128 billion in 4QFY21. EBITDA Margins for 4QFY22 stood at ~27.4%. EBIT margin during the quarter were flat at 25% QoQ. During the quarter there was pressure on margins due to supply side challenges which were mitigated from operational efficiencies and currency support. The profit after tax (PAT) for 4QFY22 came in at Rs. 99.6 billion as against Rs. 92.8 billion during 4QFY21 recording a growth of 7.3% YoY. Net income margin stood at 19.7%.
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 recommend BUY rating on the stock with a revised target price of Rs.4,350 per share.