Tata Consultancy Services (TCS) management indicated that overall demand remains good and in line with its expectations, with 1HFY15 growing faster than 2HFY15. 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.
Commenting on TCS, Angel Broking, said, ''TCS to outperform industry on revenue growth due to its superior market reach and excellent execution capabilities. Management commentary on demand trends for FY2015 continued to be reassuring led by a favorable demand environment and market share gains. 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. We maintain our Buy rating on the stock.''
''We note that valuations, though at a premium to the sector, have moderated to 19x FY15E earnings. We think predictable growth and the ability to navigate margins will support TCS's premium over the sector. An improvement in demand outlook and continued execution would be the key stock triggers. Maintain Buy with a target price of Rs 2,450, said, Religare Research.
Shares of the company declined Rs 102.75, or 4.84%, to trade at Rs 2,019.80. The total volume of shares traded was 119,316 at the BSE (10.03 a.m., Wednesday).
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