Edelweiss recommended hold rating on Tata Consultancy Services with a target price of Rs 1943 in its research report dated July 10, 2018.
Edelweiss' research report on Tata Consultancy Services
Tata Consultancy Services (TCS) reported Q1FY19 revenue and operating margin of USD5,051mn (up 1.6% QoQ, 4.1% in cc) and 25.0%, respectively, exactly in line with our estimates and ahead of Street’s. Key highlights: 1) strong BFSI revival—up 3.7% QoQ; 2) best Q1 growth of ~10% YoY in last three years; and 3) robust growth in UK and Europe of ~19% YoY.
However, despite the sector-leading multiple of 22x FY20E EPS (20x earlier), CMP (21.2x FY20E EPS) factors in all positives. Maintain ‘HOLD/SP’ with a revised target price of INR1,943 (INR1,661 earlier).
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