Buy Tata Consultancy Services, target Rs 2,510: Anand Rathi

Tata Consultancy Services (TCS) is an IT services, consulting & business solutions provider that has been partnering with the world’s largest businesses in their transformation journeys for over past fifty years.

The company has grown consistently at industry leading growth rates on the back of its strategy of adding new clients, winning large deals and co-innovating with customers.

Revenue for the company came in at Rs 38,172 crore in Q1-FY20, up by 11.4 percent YoY. In Constant currency, revenue has registered a growth of 10.6 percent YoY.


UK, Europe and India lead growth: +16 percent YoY. +15 percent YoY and +15.9 percent YoY respectively. Net addition of 12,356 employees during the quarter, highest in five years.


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Net Income for the quarter came in at Rs 8,131 crore, up by 10.8 percent YoY. Also, Operating Margin and Net Margin came in at 24.2 percent and 21.3 percent respectively.

TCS strong TCV wins, improving YoY growth in BFSI, all-round vertical growth, rising digital revenue and healthy Q4 exit rate drive confidence on underlying momentum, and we expect the IT major to comfortably post double-digit revenue growth in FY20E.

We expect growth momentum to continue in FY20, given deal wins of USD 6.2 billion in Q4-FY19.

We initiate our coverage on Tata Consultancy Services with a buy rating and target price of Rs 2,510 per share.

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tags #Stocks Views #Tata Consultancy Services #TCS

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