‘Neutral’ on TCS, target price Rs 2,340: Nomura

By: | Updated: March 23, 2016 7:51 AM

We attended the TCS analysts’ day, with sessions from CEO and the MD, business heads of different verticals and the CFO.

As per the company, 52% of their customers are already collaborating with TCS as their prime digital partner and it expects the remaining 48% to start digital adoption soon. However, the company did not specify a time frame. (PTI)As per the company, 52% of their customers are already collaborating with TCS as their prime digital partner and it expects the remaining 48% to start digital adoption soon. However, the company did not specify a time frame. (PTI)

We attended the TCS analysts’ day, with sessions from CEO and the MD, business heads of different verticals and the CFO. While there were no comments on the outlook, management did not sound negative on the demand outlook.

We remain Neutral on the stock and maintain our target price of R2,340. Longer term, management sounded positive given TCS’s presence across all geographies and lower market share of less than 3% across all regions, which provide headroom for future growth (2.8% share in UK, 2.1% share in North America, etc).

The primary theme of the event was focused on digital, the investments TCS has been making, the outcomes the company has seen so far and the road ahead in the digital journey.

As per the company, 52% of their customers are already collaborating with TCS as their prime digital partner and it expects the remaining 48% to start digital adoption soon. However, the company did not specify a time frame.

In terms of technologies, the company sees a strong adoption of Cloud, Analytics & Insights and Digital Marketing, which have grown at a CQGR of 12%, 10% and 8% respectively.

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