Buy Tata Consultancy Services Ltd For Target Rs.4169 - Nirmal Bang
* TCS is one of the largest IT service Provider
* TCV wins for FY21 stood at $31.6Bn (+16.7%). 9MFY22 TCV wins stood at $23.3Bn (+4.5%) On the people front, the company added 68337 employees in 9MFY22 vs 47797 in 9MFY21 taking the total base to 556986 during the quarter, an all-time high employee base which gives confidence about the robust demand pipeline going ahead.
* TCS is also investing in growth and transformation services of its clients , management expects better revenue growth for the next 3-5 years and operating costs to normalise post the pandemic
* Approved Buyback of Rs 18000 cr at a Price of Rs 4500 per share. The record date is not yet announced . Minimum no of days between announcement date to buyback completion previously is around 90-100days . So buyback completion is expected to happen in April. Assuming acceptance ratio of 50% at CMP , investment gain is around 9.7%
* Looking at TCS being confident with multi -year growth opportunity, accompanied with buy back opportunity , we feel TCS is available at attractive valuation at PE of 31.7x FY23E EPS
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