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Alpha | TCS Ltd- Equity Research Desk

October 29, 2022 . Equities Desk

Alpha . Equity Research

TCS Ltd. – Pioneer of IT Sector

Established in 1968 as a division of Tata Sons, Tata Consultancy Services (TCS) Limited is currently the largest Indian IT services company. The company pioneered the concept of offshore IT services in 1974 and emerged as an integrated full-service provider with a global footprint. TCS is a part of the Tata Group, with Tata Sons holding a 72.3% equity share (as on March 31, 2022) in the company. A part of the Tata group, India’s largest multinational business group, TCS has over 592,000 of the world’s best-trained consultants in 55 countries. The workforce continues to be very diverse, comprising 157 nationalities and with women making up 35.7% of the base.

Valuation

From a long-term perspective, we believe TCS has built a resilient business model by securing multiple long-term contracts with the world’s leading brands. Given TCS size, order book and exposure to long duration orders and portfolio, it is well positioned to withstand the weakening macro environment and ride on the anticipated industry growth. Hence, we recommend an ACCUMULATE rating in the stock with the target price (TP) of Rs.3680, 28x FY24E EPS.