Today on 22nd December, Tata Consultancy Services Limited (NSE:TCS) has won a mega $2.25 billion outsourcing deal, signed with television ratings measurement company Nielsen. The deal is considered the largest ever contract for an Indian IT firm. As per the contract, TCS has assured a business of $320 million from Nielsen every year, from 2017 to 2020. TCS has claimed that the company is in 2nd position as the top wealth creator from the last 5 years after Reliance Industries
TCS Stock Price 1 year Chart
Second Quarter Performance
TCS in the second quarter had experienced huge volume growth due to the strong demand across multiple industry verticals. TCS’s performance in the second quarter, has posted 3.1% growth on the first quarter, was due to the 5.3% constant currency rise in revenue from clients in continental Europe, that forms about 12.5% of total revenue. TCS has improved its operating margin by 170 basis points sequentially to 25.1% from 23.4% in the April-June quarter, but is 90 basis points less than 26% at the end of year-ago period. A Bloomberg survey of analysts had estimated that TCS will report Rs6,283.5 crore ($961.36 million) profit on net sales of Rs30,501.6 crore ($4.667 billion).
Future Outlook
TCS expects to get revenues of approximately $1 billion each from several emerging technology segments over next three to seven years. The segments will be focused on new technology arenas such as cyber security, internet of things (IoT), analytics of IoT, blockchain and cloud application and infrastructure. Moreover, the company gained share in the fast growing Digital spend and focusing on individual components of the Digital service stack. The company is putting its contextual knowledge, research and innovation, and investments in location-independent agile, automation and cloud on the customers’ transformational imperatives and to become a trusted partner in Business 4.0 journeys.
TCS wins two awards in the @Forbes 2017 Global 2000 list. Know more https://t.co/tonIbZSTX7 pic.twitter.com/SZTUW9fNdt
— TCS (@TCS_News) December 12, 2017
Recommendation
The mean consensus of 47 analysts are “Hold” on the stock. However, with the a mega $2.25 billion outsourcing deal on hand, we expect the target price to be INR 3000.
Disclaimer: Do not make actual stock trades based on comments on the site, nor on any techniques presented nor discussed in this site or any other form of information presentation. Finance Minutes will not be held liable for any losses you in occur while trading. Consult with a registered investment advisor, prior to making any trading decision of any kind.
Pingback: Sensex and Nifty Closes Record High Before Christmas led by ONGC
Pingback: TCS Share Price Outlook After Q3 Results Declared