Anand Rathi has given Buy recommendation for Tata Consultancy Services with a target price of Rs. 4350 in its research report issued on Apr 14, 2022

Anand Rathi’s research report on Tata Consultancy Services

Tata Consultancy Services Limited (TCS) reported good growth in topline in line with our expectations with revenue from operation growing 15.8% YoY to Rs. 505.9 billion during 4QFY22 as against Rs. 437.1 billion in 4QFY21. The company recorded Constant Currency Revenue growth of 14.3% YoY. The Company recorded revenue at Rs. 1,917.5 billion for FY22, a growth of 16.8%. The company reported EBITDA of Rs. 138.5 billion in 4QFY22 as against Rs. 128 billion in 4QFY21. EBITDA Margins for 4QFY22 stood at ~27.4%. EBIT margin during the quarter were flat at 25% QoQ. During the quarter there was pressure on margins due to supply side challenges which were mitigated from operational efficiencies and currency support. The profit after tax (PAT) for 4QFY22 came in at Rs. 99.6 billion as against Rs. 92.8 billion during 4QFY21 recording a growth of 7.3% YoY. Net income margin stood at 19.7%.

Outlook

With continuity of robust growth across segments, we expect the growth momentum to continue in the medium term supported by strong deal pipeline and ramp up of large deals. We recommend BUY rating on the stock with a revised target price of Rs.4,350 per share.

More Info

At 17:30 Tata Consultancy Services was quoting at Rs 3,661.30, down Rs 30.15, or 0.82 percent.

It has touched an intraday high of Rs 3,710.05 and an intraday low of Rs 3,657.00.

It was trading with volumes of 106,056 shares, compared to its thirty day average of 114,930 shares, a decrease of -7.72 percent.

In the previous trading session, the share closed down 0.13 percent or Rs 4.95 at Rs 3,691.45.

The share touched its 52-week high Rs 4,045.50 and 52-week low Rs 3,004.80 on 18 January, 2022 and 03 May, 2021, respectively.

Currently, it is trading 9.5 percent below its 52-week high and 21.85 percent above its 52-week low.

Market capitalisation stands at Rs 1,340,035.80 crore.

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