Daily BriefsTMT/Internet

TMT: SUMCO Corp, Tata Consultancy Svcs, Largan Precision and more

In today’s briefing:

  • Sumco Placement Quick Update – A Slightly Wider Discount than 2015
  • Growth optimism intact, but near term hiccups limit upside
  • Tata Consultancy Services: Margin Expansion QoQ a Positive Surprise
  • Largan (3008 TT, NEUTRAL, NTD2,005.00)
  • Tata Consultancy Services: Outlook Continues to Be Positive, Backed By Execution Prowess


Growth optimism intact, but near term hiccups limit upside

By Motilal Oswal

In line CC growth, but miss on USD revenue and margin: TCS reported an in line revenue growth of 4% QoQ CC in 2QFY22. However, USD revenue growth (2.9% QoQ) missed our estimate of 3.7% QoQ growth. EBIT margin expanded by 10bp QoQ to 25.6%, but was lower than our estimate of 26.2%, on supply side challenges. PAT stood at INR97b, up 6.9% QoQ, aided by higher other income and stable ETR. The company reported an OCF/PAT of 103% and a FCF/PAT of 97% on good working capital management, indicating the ability to generate strong cash flow.

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Tata Consultancy Services: Margin Expansion QoQ a Positive Surprise

By ICICI Securities Limited

The company’s deal pipeline continues to be healthy at US$7.6 billion.

Target Price and Valuation: We value TCS at Rs 4,530 i.e. 34x P/E on FY23E EPS…

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Largan (3008 TT, NEUTRAL, NTD2,005.00)

By Capital Securities

iPhone adoption of lower-grade lenses affects earnings; reiterate NEUTRAL. iPhones may massively feature lower-grade lenses in the future. However, its adoption of lower-grade 6P and 7P lenses with lower prices and GM might cap Largan’s revenue/earnings.. We reiterate NEUTRAL on Largan.

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Tata Consultancy Services: Outlook Continues to Be Positive, Backed By Execution Prowess

By Axis Direct

We recommend a HOLD rating on the stock and assign a 30x P/E multiple to its FY24E earnings of Rs 135.2/share to arrive at a TP of Rs 4,110/share, implying an upside of 4% from CMP.

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