Fundamental Result Update

TCS - Q1FY18 Result Update



TCS has delivered a strong topline performance with 3.5% qoq volume growth, driven by sustained traction in the Digital service offerings. The growth in focus geographies was encouraging across verticals with a cautiously optimistic approach towards Insurance and Retail. Focus shifted to profitability given the declining operating leverage, appreciating INR and compulsive commitments towards onsite hiring, digital skill training and sales with contextual expertise.

Outlook: The outlook on the business growth has been largely kept intact with strong growth in Digital business and improved business metrics on the segment - size, scale, and competitiveness. Taking into account the risk to growth estimates and likely impact on profitability, we have a NETURAL rating on the stock with TP of Rs 2416 based on P/E of 16x FY19E EPS of Rs 151.

 


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