Geojit has given Buy recommendation for Tata Consultancy Services with a target price of Rs. 4298 in its research report issued on Oct 12, 2021
Geojit’s research report on Tata Consultancy Services
Tata Consultancy Services, a division of Tata Sons Limited, is a global IT services organization that provides a comprehensive range of IT services to its clients in diverse industries. The Company, caters to finance and banking, insurance, telecommunication, transportation, retail, manufacturing, pharmaceutical, and utility industries. Q2FY22 revenue rose 16.8% YoY (+3.2% QoQ, +15.5% YoY on constant currency (CC) basis), led by double digit growth across all divisions. EBITDA margin contracted 70bps to 28.0% owing to high cost of sales and operating costs. Adj. PAT surged 10.7% YoY on higher other income. Company plans to hire over 40,000 freshers during FY22, anticipating strong demand in coming quarters. Strong TCV, new deals acquisition, robust growth across segments will continue to drive performance in coming quarters, for which the hiring cycle has also picked up pace.
We reiterate our BUY rating on the stock with a revised target price of Rs. 4,298 based on 36x FY23E adj. EPS.