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TCS Q1 Review: Better-Than-Expected Commentary Keeps Motilal Oswal Bullish — Check Target Price

While the IT major expects demand to improve in Q2, Motilal Oswal believes growth will continue to come from select pockets rather than a broad-based pickup.

TCS Q1 Review: Better-Than-Expected Commentary Keeps Motilal Oswal Bullish — Check Target Price
TCS reported Q1 FY27 USD revenue of $7.6 billion, up 0.4% QoQ in CC and above Motilal Oswal's estimate of flat QoQ CC growth.
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Tata Consultancy Services Ltd.
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NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Tata Consultancy Services Ltd. remained in focus after Motilal Oswal reiterated its 'Buy' rating on the stock with a target price of Rs 2,350, implying a potential upside of around 15% from current levels.

The brokerage maintained its positive stance after the IT services giant reported a better-than-expected performance for the June quarter.

TCS Q1 FY27 Results

TCS reported Q1 FY27 USD revenue of $7.6 billion, up 0.4% QoQ in CC and above our estimate of flat QoQ CC growth. Q1 growth was led by hi-tech/ BFSI/regional markets, up 1.7%/1.6%/4.0% QoQ cc, while consumer/ healthcare fell 4.0%/1.0% QoQ cc.

Ebit margin was 24% (down 130 basis points QoQ), in line with our estimate of 23.9%. Adj PAT was up 1% QoQ/8.6% YoY at Rs 13,900 crore, above brokerage's estimate of Rs 13,6000 crore.

In INR terms, Q1 FY27 revenue/Ebite/adjusted net profit grew 13.9%/11.6%/8.5% YoY. Cash flow from operations stood at 93% of net profit for Q1 FY27.

In Q2 FY27, Motilal Oswal expect revenue/Ebit/adj. PAT to grow 10%/8.4%/9.3% YoY.

TCS reported a deal total contract value of $9.5 billion, down 20.8% QoQ and up 1.1% YoY. The book-to-bill ratio stood to 1.2 times.

Click on the attachment to read the full report:

Motilla Oswal Tcs Q1 Review.pdf
VIEW DOCUMENT

ALSO READ: From TCS, Happiest Minds To Bharti Airtel, IndiaMart: What to Expect From Q1 Results Across IT and Telecom Sectors

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This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

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