TCS\u2019 c\/c revenue growth was a modest 1.7%, even as margin performance surprised positively. The company will end FY2018 with modest c\/c revenue growth of 7%, lower than 8.3% in FY2017. Barring its reluctance to use money for buy decisions, TCS is making the right bets for growth. However, a perfect storm scenario for Indian IT has meant that growth has slipped far more than expected. The stock\u2019s current valuation at 17.5X FY2019e earnings is full and does not offer any upside. We tweak EPS estimates and maintain Reduce rating. Q2FY18 \u2014 another weak quarter; margin surprise drives earnings outperformance: Revenue growth of 1.7% in c\/c was below our estimate and weak for a seasonally strong quarter. Weak financial services and retail verticals were the culprits with modest 4.7% c\/c growth and 1.4% decline on y-o-y basis. From geographical standpoint, Europe and APAC drove revenue growth. The company contained costs well after slippage in Q1FY18 resulting in 170 bps q-o-q expansion in Ebit margin to 25.1%, though down 90 bps y-o-y. Non-employee cost management was the primary driver accounting for 75% of the margin change on q-o-q basis. The company has maintained margin guidance of 26-28% in c\/c though the target appears stretched. Making right moves, but too many headwinds neutralising it: While the technology spending has remained robust, this has not translated into adequate growth for TCS and Indian IT. A combination of factors has meant slowdown in growth. Some of these headwinds are cyclical in nature; however, timing of their abatement is difficult to forecast though the industrialisation phase of digital seems to be making its way into the retail vertical. We like TCS model but find the stock fully valued: There is plenty to like about TCS\u2014a well-rounded business model, leadership in multiple industries and solid capital return policy. However, c\/c revenue growth in FY2018 will be a modest 7%. Growth acceleration is difficult to call even as our estimates build in marginal uptick. Stock valuation at 17.5X FY2019E earnings is full against this backdrop. We value TCS at 16X September 2019E earnings leading to fair value of Rs 2,500 (Rs 2,350 earlier).