Ashwin Mehta and Vamsi Krishna of Ambit Capital Views on TCS,
We remain below consensus on growth/margins and see risks to consensus margins on supply-side pressures and discretionary cost reversals. Broad-based growth underperformance versus Infosys/Accenture over 11-12 quarters and TCS not being immune to sectoral growth/margin moderation do not justify current valuation premiums. Stock valuations of 28.4x 1-year forward P/E imply USD revenue CAGR of 11.7% at average EBIT margin of 24.5%. Lower TP to Rs2,865 (vs Rs2,950 earlier), implying ~23x 1-year forward EPS upto Jun-24E of Rs124.7. Target Price Rs 2865
