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TCS Target Price Revised After Q1 Results; Systematix Sees Gradual Recovery Ahead — Check Upside, Ratings

The brokerage believes that TCS is likely to minimise its revenue growth gap with peers in FY27E, supported by net-new large deals, and potential pick-up in developed markets.

TCS Target Price Revised After Q1 Results; Systematix Sees Gradual Recovery Ahead — Check Upside, Ratings
TCS has outperformed both peers on margins and net profit growth over the three- and five year periods, adds Systematix..
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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.

Systematix Report

The brokerage firm Systematix has retained its 14 times target P/E multiple, supported by improving client cohort metrics, a 5% payout yield and an attractive 6.5% FCF yield. Accordingly, it has maintained Hold rating with a revised target price of Rs 2,320, based on 14x June 2028E earnings per share.

TCS delivered in-line revenue growth, supported by India, technology and services, and BFSI. While TCV fell 21% QoQ to $9.5 billion, the higher share of net-new deals, led by the $800 million SKF mega deal, improves FY27 visibility.

On YoY, client additions remained healthy across major revenue bands for the second consecutive quarter. BFSI is expected to sustain growth momentum, while other key verticals such as manufacturing, life sciences and tech services are likely to improve in Q2.

AI is also emerging as a meaningful growth driver, with annualised AI services revenue reaching $2.6 billion, or ~8.5% of revenue.

The brokerage believes that TCS is likely to minimise its revenue growth gap with peers in FY27E, supported by net-new large deals, and potential pick-up in developed markets.

Click on the attachment to read the full report:

Systematix Tcs Q1 Review.pdf
VIEW DOCUMENT

ALSO READ: TCS Q1 Review: Brokerages Split; Jefferies Sees 25% Downside, JPMorgan, Kotak Stay Bullish

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