Revenue decline of 4.6% (QoQ, CC) was in-line as weakness in the DXC channel was overshadowed by largely stable performance in Direct. Deal wins (USD259m) during the quarter were the strongest ever at 66% YoY. Guidance on the ability to defend margins, a strong order book, and a robust deal pipeline even after a couple of large deal wins is encouraging. This should translate into one of the best performances in the industry in FY21. We upgrade our FY21/FY22E EPS by ~4%/2%, largely driven by: (a) recent large deal wins and (b) an optimistic outlook. Maintain Neutral.
OutlookThe stock is currently trading at ~18x FY21E EPS. We value the stock at ~16x FY22E EPS. Maintain Neutral.
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