CLSA puts "outperform" on Tata Consultancy
TCS' 40%+ exposure to financial services clients impacted its financial performance through FY09.
By ET Bureau |
TATA CONSULTANCY
RESEARCH: CLSA
RATING: OUTPERFORM
CMP: RS 532
TCS' 40%+ exposure to financial services clients impacted its financial performance through FY09. However, the flexibility TCS showed with its financials clients in FY09 is likely to payback in FY10. Traction in a few large North American retailers is also expected to drive a double-digit growth in TCS' retail vertical.
Gains made in the BP consolidation deal should further boost revenue visibility. Telecom and manufacturing (auto and auto ancillaries) remain impacted and recovery is likely a FY11 story here. TCS had qualitatively indicated a flattish q-o-q dollar revenue growth in the September quarter.
CLSA checks indicate that these numbers will be proven low, compared to the ramp-up beginning among TCS' customer base. A higher revenue throughput could also drive upside margin surprises. CLSA expects flattish q-o-q margins. TCS has been a relatively modest performer in the last one month compared to other Indian IT stocks, after having held up better through H12009.
RESEARCH: CLSA
RATING: OUTPERFORM
CMP: RS 532
TCS' 40%+ exposure to financial services clients impacted its financial performance through FY09. However, the flexibility TCS showed with its financials clients in FY09 is likely to payback in FY10. Traction in a few large North American retailers is also expected to drive a double-digit growth in TCS' retail vertical.
Gains made in the BP consolidation deal should further boost revenue visibility. Telecom and manufacturing (auto and auto ancillaries) remain impacted and recovery is likely a FY11 story here. TCS had qualitatively indicated a flattish q-o-q dollar revenue growth in the September quarter.
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CLSA checks indicate that these numbers will be proven low, compared to the ramp-up beginning among TCS' customer base. A higher revenue throughput could also drive upside margin surprises. CLSA expects flattish q-o-q margins. TCS has been a relatively modest performer in the last one month compared to other Indian IT stocks, after having held up better through H12009.
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