Sharekhan's research report on Tata Consultancy Services
Core verticals return to growth, especially for BFSI, coupled with an uptick in BFSI spends and supported by potential interest rate cut tailwinds to drive performance in the near and medium term. EBIT margin is expected to show an uptick going ahead in FY25 with wage hike headwind behind and assisted by margin levers of pyramid, productivity, and utilisation. The company’s ability to leverage its comprehensive service offerings and deep industry-specific expertise positions it favourably to take advantage of opportunities in emerging technologies, which is evident from the robust AI and GenAI pipeline.
Outlook
We maintain BUY on TCS with revised PT of Rs. 5,230 (valued at 32x Sept 26E EPS). At CMP, the stock trades at 31.9/28.6/26.3x its FY25/26/27E EPS.
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