We have collated earnings preview for Tata Consultancy Services (TCS). The same is as follows:
Motilal Oswal Securities said, ''TCS Q4FY14 revenue growth will be impacted by the seasonal slowness of budgeting quarter. Additionally, 4Q which was seasonally strong quarter for India geography, is expected to see decline in India revenues this quarter. As a result, overall constant currency revenue growth in Q4 could even be lesser than that in Q3 (when revenues grew 2.1% CC). Margins are expected to remain stable, with nearly 40bp headwinds from reinvestments of currency benefits. We model 2.4% QoQ USD revenue growth in Q4 and flat EBIT margin at 29.7%.
We expect TCS to grow its USD revenues at a CAGR of 17% over FY14-16E and EPS at CAGR of 22% during this period. Our target price of Rs 2,350 discounts FY16E EPS by 18x, implying 11% upside. Maintain 'Neutral' on Tata Consultancy Services (TCS) with target price of Rs 2,350 as against current market price (CMP) of Rs 2,123.
Meanwhile, Angel Broking opined, "Tata Consultancy Services (TCS) management indicated that overall demand remains good and in line with its expectations, with 1HFY2015 expected to grow faster than 2HFY2015. This is expected to be led by the likely return of discretionary spending, increased penetration in Europe and that the company has not seen any ramp downs or cancelations in projects in recent weeks. We believe TCS is likely to deliver a 2.7-3% qoq volume growth in Q4 FY2014 but this should not be any indication of slowdown in demand.
We expect TCS to grow its USD revenues at a CAGR of 16.5% over FY2013-15 and EPS at a CAGR of 25% during this period. TCS has executed well over the past many quarters and currently trades at 18.5x FY2015E EPS. We believe TCS' premium multiples are well deserved given consistency in performance and leadership in growth, profitability. Maintain Buy rating on the stock with a target price of Rs 2,470."
Prabhudas Lilladher expects near term weakness in price due to weaker than expected Q4FY14. The stock broker has reiterated 'Accumulate' on TCS with target price of Rs 2,560 as against current market price (CMP) of Rs 2,122.
