1
Please refer to important disclosures at the end of this report
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1
Tata Consultancy Services is the IT products arm of the Tata Group. It
provides consulting-led integrated portfolio of information technology (IT)
and IT-enabled services delivered through a network of delivery centers
around the globe. The company has delivered 12.4% revenue CAGR for 5
years ended FY19 and net profit during the said period stood at 10.6%. In
1QFY19 sales grew by 11.4% yoy. Orders from UK and Europe supported
this growth. However, EBITDA margin contracted by 18bps due to increase in
salary expense and sub-contracting.
TCS’ growth, scale and durability are its key strengths. Growth in digital,
momentum in deal wins and strong hiring trend are positive demand
indicators. TCS’ offshore leverage in digital, outperformance in BFSI and
superior execution standout. The company is absolutely debt free and
delivers a whopping 48% RoCE. It currently trades at 24.3x of its earnings
and this is at a lower side in the last one year. ITCS pays attractive dividends
averaging 35%. Hence Buy.
BUY
CMP `2,088
52 Week High / Low
2296/1784
Avg. Daily Volume
1,27,565
IT
Market Cap (` cr)
78,33,666
1
BSE Sensex
38,990
Nifty
11,571
Face Value (`)
Reuters Code
TCS.BO
TCS IN
1.0
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
TCS Ltd
Others | IT
Sept 26, 2019
2
TCS Ltd| IT
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement TCS Ltd
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)