Edelweiss' research report on TCS
Tata Consultancy Services’ (TCS) Q4FY17 revenue at USD 4,452mn, moved up 1.5% QoQ versus 1.6% Street estimate. EBIT margin at 25.7% (down 30bps QoQ) came below Street’s estimate of 26.0%. Revenue miss was due to the decline in retail and US markets, while margin miss was led by currency volatility.
Outlook
We continue to believe that limited margin levers will cap TCS’ earnings growth to revenue growth. Maintain ‘HOLD’ with revised TP of INR 2,395 (INR 2,475 earlier).
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