Prabhudas Lilladher's research report on TCSTata Consultancy Services’ (TCS’) Q3FY16 revenues were below muted expectations, while profit was in line. This quarter’s performance was marred by seasonality, India& Japan business, Dilligenta and Chennai floods. Based on management commentary, we believe that revenue growth has bottomed out in Q3FY16 and we expect TCS to report ~12% YoY CC revenue growth in FY16/17. Revenue growth moderation is largely factored in almost ~20% multiple de‐rating (21x to 17x 1 year forward PE) over the past 12 months. While the stock lacks near‐term triggers, we find stock attractive at 16‐17x 1 year forward PE with a 12‐15% EBIT growth profile.Retain ‘BUY’ with revised TP of Rs 2,600 (Old:Rs 2,910): We have revised EPS marginally down by ~1% and lowered target PE multiple to 18x from 20x, factoring the growth moderation.For all recommendations, 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.
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