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REDUCE
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CMP: Rs2446 | Target Price: Rs2320
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■ Q1FY18 performance was better on revenue front, driven by strong volume growth of 3.5% qoq. The growth in focus geographies was encouraging across verticals with a cautiously optimistic approach towards Insurance and Retail.
■ TCS is gaining significantly on competencies across Digital service offerings, leading to a sustained deal win traction, improved deal win ratios, and gain in deal sizes & complexity. Digital grew 7.6% qoq in CC terms and accounted for over 50% of incremental revenues.
■ Focus shifted to profitability given the declining operating leverage, appreciating INR and compulsive commitments towards onsite hiring, digital skill training and sales with contextual expertise.
■ We cut our FY18/19E EPS by 3%/4% to factor in lower profitability in our estimates. We continue to prefer players with growth acceleration such as Mphasis, Mindtree and L&T Infotech.
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Recommendation History
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Recent Research Reports
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