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    Edelweiss Securities bets on TCS’ strong orderbook, expects earnings to improve

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    Edelweiss Securities bets on TCS’ strong orderbook, expects earnings to improve

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    Tata Consultancy Services (TCS) missed the mark in Q1FY22. Dollar revenue, profit and margins all came in below estimates but the deals pipeline remains strong with an orderbook of over USD 8 billion dollars. Sandip Agarwal, Research Analyst, Institutional Equities, Edelweiss Securities, discussed the numbers.

    Tata Consultancy Services (TCS) missed the mark in Q1FY22. Dollar revenue, profit and margins all came in below estimates but the deals pipeline remains strong with an orderbook of over USD 8 billion dollars. Sandip Agarwal, Research Analyst, Institutional Equities, Edelweiss Securities, discussed the numbers.
    According to him, the business has not shown any sign of weakness or concern because all the disappointment which is there is primarily led by the Indian market.
    “I don’t see any sign of weakness, the orderbook is strong, the worst of margins is also behind and from here, things will only improve,” he said.
    “We should be only negative on a sector or a company when business deteriorates, I don’t see any sign of business deterioration in the overall TCS numbers,” he added.
    He believes, one should see all the IT stocks as constant cash generators. “With continuous buyback and no debt, it is a very good, stable, cash generating business, their multiples will tend to be high and they will increase, going forward,” he shared.
    If third wave of COVID-19 comes, it will impact other businesses much more than IT, he said.
    “In an upcycle, we should use all dips to buy and we are in a very strong upcycle,” he stated.
    For the full interview, watch the video.
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