Emkay Global Financial's report on TCS
As per our interaction with TCS management, the company does not see any softness in demand or any delay in decision-making from clients despite the uncertain macro environment. Management is confident of sustaining revenue growth momentum in the coming quarters. TCS indicated that the deal pipeline remains healthy with a good mix of small, medium and large deals. The company further indicated that the deal closure velocity remains steady and it is not witnessing delays in decision making. TCS signed deals worth USD34.6bn in FY22 (up ~10% YoY). Margins are expected to remain under pressure in H1FY23 on account of headwinds stemming from wage hikes (w.e.f Q1) and an uptick in travel and visa costs. Margins should improve in H2, driven by normalization of salary hikes, moderation in attrition and benefits accruing from better pricing.
TCS is well poised to benefit from strong demand and growing digital transformation opportunities. Key concerns include salary inflation, currency volatility and a potential slowdown in US/Europe. We have a Buy rating with a TP of Rs4,000 at 28x Mar’24E EPS.
At 14:00 hrs Tata Consultancy Services was quoting at Rs 3,154.80, down Rs 52.00, or 1.62 percent.
It has touched an intraday high of Rs 3,241.65 and an intraday low of Rs 3,147.45.
It was trading with volumes of 137,150 shares, compared to its thirty day average of 117,128 shares, an increase of 17.09 percent.
In the previous trading session, the share closed down 0.14 percent or Rs 4.45 at Rs 3,206.80.
The share touched its 52-week high Rs 4,045.50 and 52-week low Rs 3,133.20 on 18 January, 2022 and 28 July, 2021, respectively.
Currently, it is trading 22.02 percent below its 52-week high and 0.69 percent above its 52-week low.
Market capitalisation stands at Rs 1,154,357.53 crore.
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