Buy Tata Consultancy Services; target of Rs 4810: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Tata Consultancy Services has recommended buy rating on the stock with a target price of Rs 4810 in its research report dated January 10, 2025.

Broker Research

January 10, 2025 / 11:35 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Tata Consultancy Services

Revenue reported at USD 7.5 bn, flat QoQ in CC (down 1.7% QoQ in USD) vs our & cons. est. of 0.4% QoQ CC growth. The growth was led by regional market & India regions, primarily attributed to the continued ramp up of BSNL deal, although the incremental growth from the deal has come off substantially in 3Q and it would decelerate further in 4Q. EBIT margin increased by 40 bps QoQ to 24.5% largely in-line with cons. est, & below PLe of 24.8%, attributed to the tailwinds of operational efficiencies, improved utilization & pyramid optimization. Deal TCV was encouraging with strong wins reported in BFSI, Retail & North America leading to total TCV of USD 10.2 bn, up 18.6% QoQ & 25.9% YoY, which translates to BTB of 1.3x (TTM).

Outlook

We estimate USD revenue/earnings CAGR of 7.6%/13.1% over FY25-FY27E. The stock is currently trading at 23.3x FY27E, we are assigning P/E of 28x to FY27E with a target price of INR 4,810. We maintain “BUY” rating.

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