Girish Pai

Nirmal Bang

Equity Bottom-Up

<p>4QFY21 Result Update</p>
<h2>Tata Consultancy Services</h2>
<h3>Growth longevity will keep PE elevated</h3>
<p>TCS delivered a strong 4.2% QoQ CC revenue growth and EBIT margin of 26.8% in 4QFY21 though they were a tad below our expectations of 4.5% and 27.1%, respectively. This performance was driven by work connected with core transformation, market share gains and execution of some of the large deals won earlier. Just like 3QFY21, 4QFY21 growth seems a 9-year best and is more or less broad-based, both vertically and…</p>

<p>3QFY21 Result Update</p>
<h2>Tata Consultancy Services</h2>
<h3>Pricey but growth surprises possible near term</h3>
<p>TCS’ 3QFY21 delivered a 9-year best, broad-based and better-than-expected 4.1% QoQ constant currency (CC) revenue growth in a seasonally weak quarter, significantly better than our estimate of 1.5% and that of consensus (~3%). Margin expansion of 40bps QoQ was a surprise (against expectation of a decline) after absorbing a 160bps hit from salary hike. YoY CC revenue growth turned positive one quarter…</p>

<p>2QFY21 Result Update</p>
<h2>Tata Consultancy Services</h2>
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<h3>Stronger for longer? TCS most valuable global IT services firm; 3Q bit soft</h3>
<p>TCS’ 2QFY21 demonstrated broad-based 4.8% QoQ constant currency (CC) revenue growth, which was a tad better than our above consensus 4.5% estimate. This was also ahead of its own expectation, leading to revenue recovery being brought forward by a quarter. Continental Europe, BFSI, Retail &amp; CPG, Life Sciences and Health Care were key growth drivers QoQ. TCS said that it…</p>
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<p>1QFY21 Result Update</p>
<h2>Tata Consultancy Services</h2>
<p>Under Review</p>
<p><strong>CMP</strong>: Rs2,204</p>
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<h3>In line performance. Reiterates a V shaped recovery</h3>
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<p>TCS’ 1QFY21 was in line with the trajectory of growth indicated in April 2020. EBIT margin was in line with our estimate though it would have likely disappointed the street. The V shaped recovery hints at a growth pick up from 2Q itself and would lead to 3QFY21 INR revenues to be in line with that of 3QFY20 and 4Q CC revenue to be flat YoY. According to TCS…</p>
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Morningstar

Morningstar, Inc.

Tata Consulting Services reported a solid start to the fiscal year, but revenue growth was a little modest versus our expectations, and management is taking a wait-and-see approach to the second quarter to determine whether a double-digit full-year revenue growth outlook is a reasonable forecast. Tata noted that banking &amp; financial services and retail had been slightly softer than expected, and we were assuming as much with peers such as Cognizant seeing a similar trend especially in the banking…

India

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.

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