Arihant Capital's research report on Tata Consultancy Services
TCS Q3FY22, Revenue significantly above estimate; EBIT margin below estimate on high subcontracting and other expenses. Constant Currency Revenue growth +14.4% YoY/3% QoQ to (Mn USD) 6,524 against our estimate 6,460 (Mn USD). Reported revenue of INR (up 4.3% QoQ/16.4% YoY). The growth was broad-based led by strong performance in BFSI (up 17.9% YoY) and retail( up 20.4% YoY). EBIT margin was down 57 bps QoQ at 25.03% on the high subcontracting cost in this supply-constrained environment and other expenses. Consolidated PAT stood at INR 9,806 Cr, up by 12.4% YoY/1.6% QoQ against our estimate of INR 9,899 Cr. Announced share buyback of INR 18,000 cr at INR 4,500 / share. Also announced interim dividend of INR 7/ share.
Outlook
We value TCS at PE of 30x to its FY24E EPS of INR 141.2, which yields a target price of INR 4,235 per share. We maintain our rating to Hold.
More Info
At 17:30 Tata Consultancy Services was quoting at Rs 3,897.65, up Rs 40.40, or 1.05 percent.
It has touched an intraday high of Rs 3,944.40 and an intraday low of Rs 3,857.25.
It was trading with volumes of 368,315 shares, compared to its thirty day average of 103,347 shares, an increase of 256.39 percent.
In the previous trading session, the share closed down 1.50 percent or Rs 58.55 at Rs 3,857.25.
The share touched its 52-week high Rs 3,990.00 and 52-week low Rs 2,701.00 on 08 October, 2021 and 24 February, 2021, respectively.
Currently, it is trading 2.31 percent below its 52-week high and 44.3 percent above its 52-week low.
Market capitalisation stands at Rs 1,441,760.76 crore. For all recommendations report, click here
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