In today’s briefing:
- Earnings Update | TCS: Reports Decent Earnings
- SAIL: Bottomed Out Valuation; SAIL to Benefit from a Prolonged Steel Up-Cycle
- Godrej Consumer: Investment Rationale Intact
Earnings Update | TCS: Reports Decent Earnings
- TCS reported a healthy revenue growth of 15.4% YoY in constant currency (CC) terms. Operating margins contracted by -60bp to 25%, due to supply-side challenges.
- LTM attrition for TCS was 15.4%, best in the industry. However, on an absolute basis, it is high and TCS is continuously working on stabilizing it.
- Growth has been broad-based across sectors and the demand outlook remains robust on the back of strong spends by corporates on digital transformation and adoption of cloud.
SAIL: Bottomed Out Valuation; SAIL to Benefit from a Prolonged Steel Up-Cycle
- We initiate coverage on SAIL with a BUY recommendation and a Target Price (TP) of Rs 150/share, implying an upside of 44% from the CMP
- While we expect steel margins to come under pressure in H2FY22, they are likely to recover post H2FY22 and remain above cycle average
- Our optimism is based on the expectation of weak demand in China getting offset by lower production forecasts and China continuing to disincentivize steel exports
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Godrej Consumer: Investment Rationale Intact
- Godrej Consumer (GCPL) is our top pick from our Staples Coverage Universe from a oneyear horizon
- Recent sales growth momentum encouraging: After maintaining a Neutral view on GCPL for 10 years, we turned bullish on its prospects earlier this year
- Mr Sudhir Sitapati’s medium-term focus would be on driving double-digit volume led growth primarily via penetration gains
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
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