TCS Q4 Results Review - Margins Surprise Positively: Systematix

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 Research Report.Tata Consultancy Services Ltd.'s Q4 print was a mixed bag, with revenue growth tad below our expectations and margins surprising positively. Management in its commentary indicated that growth in its key market of North America and banking, financial services and insurance vertical seems to have bottomed out and is gradually restoring, albeit it cannot say from which quarter. We believe long-term trends in tech spending in BFSI (payment modernization, Basel III-related boost in risks and compliance, wealth management, etc.), ESG, cloud transformation and AI are intact, as customers are willing to use new technologies to reduce the time to market. We expect growth opportunities in India, Latin America, and the UK markets to offset the weakness in north America and continental Europe for some time. We have tweaked our FY25/FY26 estimates to build in 6% compound annual growth rate in revenue over FY23-26E from 7% earlier, factoring in growth recovery H2 FY25 onwards. Cost-related trends are intact and hence, we have not changed our margin estimates meaningfully. We have also not included any benefits from price hikes the company has been taking, which provides additional margin lever, in our view. .Reiterating Buy rating with a revised target price of Rs 4,600 (Rs 4,575 earlier), based on 29.5 times FY26E earnings per share. Key risks to our assumptions:Abrupt exit/s from the leadership team,sustained pressure on client discretionary spending in FY25/FY26, non-encouraging outcomes of cost saving programs, etc..Click on the attachment to read the full report:.TCS Q4 Results Review - Deal Wins To Ensure Better FY25, Commentary Remains Cautious: Dolat Capital.DISCLAIMERThis 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..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

TCS Q4 Results Review - Margins Surprise Positively: Systematix

UK, Latin America and India markets drive revenue growth

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