Motilal Oswal's research report on TCS
TCS reported revenue of USD7.6b in 2QFY25, up 2.2% QoQ in USD terms, beating our estimate of ~1.6%. Growth was driven by India (up 21.3% QoQ/93.2% YoY, aided by BSNL ramp-up) and UK (up 2.8% QoQ), while North America was down 1.7% QoQ. EBIT margins came in ~40bp below our estimate at 24.1%. PAT was down 1.2% QoQ/up 5.1% YoY at INR120b (4.1% below our est. of INR125b). For 1HFY25, TCS’s revenue/EBIT/PAT increased by 6.5%/9.5%/6.8% compared to 1HFY24. FCF conversion came in at 86% for 1HFY25 vs. 95% for 1HFY24. TCS reported a deal TCV of USD8.6b, within its usual range, up 4% QoQ and down 23% YoY. The book-to-bill ratio was 1.1x.
Outlook
We maintain our positive stance on TCS. Our TP of INR5,400 implies 33x Sep’26E EPS, with a 28% upside potential. We reiterate our BUY rating on the stock.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
