Tata Consultancy Services -Continues to be on a song - ACCUMULATE ::Emkay

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Tata Consultancy Services

Continues to be on a song

ACCUMULATE

CMP: Rs 1,125                                        Target Price: Rs 1,300

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n     Inline op performance with rev at US$ 2,412 mn(+7.5% QoQ, est +6.2% QoQ) while mgns slipping by ~230 bps QoQ (V/s exp of ~200 bps). Profit beat driven by higher other income 

n     Broad based growth across verticals/services and geographies. 10 deal wins during the qtr and remains confident of growth citing large deal pipeline ahead.

n     Op metrics performance rock solid yet again. Co remains confident of improving margins ahead and sees no significant supply side headwinds

n     Raise FY12/13E EPS by ~2.4/1.5% respectively to Rs 52.5/62.6 driven primarily by higher other income assumptions. Retain ACCUMULATE with a revised March’12 TP of Rs 1,300