InvestorQ : What is the outlook for TCS in the light of the recent results?
Sam Eswaran made post

What is the outlook for TCS in the light of the recent results?

Answer
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swati Bakhda answered.
1 year ago


TCS, part of the Tata Group, has done well post the announcement of the quarterly results. The company reported 17% growth in profits and a very strong growth in the digital franchise. Also, TCS has operating margins (OPM) of over 25% making it one of the most profitable companies in the IT sector. In terms of attrition, it has maintained its attrition at an extremely reasonable level of around 11%, which is among the best in class in the industry.

In terms of valuation, the stock quotes at a P/E of 28 times historical earnings which higher than the industry average of 21-23 times. While the stock remains the strongest play in the IT sector in terms of financial soundness, the valuations leave limited room for upsides. One must look at TCS only from a long term investment perspective and expect slightly above market returns on the stock.