Buy Tata Consultancy Services, target Rs 2,510: Anand Rathi

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26 Aug, 2025 12:21

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Anand Rathi

Tata Consultancy Services (TCS) has delivered a double digit revenue CAGR of 10.5 percent in the last three years. Its revenue has grown from Rs 10, 86,460 million in FY-16 to Rs 14, 64,630 million in FY-19.

The company has grown consistently at industry leading growth rates on the back of its strategy of adding new clients, winning large deals and co-innovating with customers.

In the latest quarterly results, digital business (31 percent of revenue) continued to steam TCS’s growth and grew by 46 percent YoY in constant currency terms. Revenue growth was 12.7 percent YoY in constant currency terms.

TCS strong TCV wins, improving YoY growth in BFSI, all-round vertical growth, rising digital revenue and healthy 4Q exit rate drive confidence on underlying momentum, and we expect the IT major to comfortably post double-digit revenue growth in FY20E.

We expect growth momentum to continue in FY20, given deal wins of USD 6.2bn in Q4-FY19, up from USD 5.9bn in Q3-FY19, and net hiring of 29,287 in FY19 vs 7,775 in FY18.

We initiate our coverage on Tata Consultancy Services (TCS) with a buy rating and target price of Rs 2,510 per share.

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