TCS, one of the largest software services exporters from India, is expected to benefit from the increased outsourcing activities due to slowdown in the USA.
The company reported a healthy performance during FY2008 considering the strong rupee appreciation and is expected to deliver good performance based on its strong global delivery model.
Going ahead TCS’s restructuring initiatives with put back the company on a strong growth trajectory. It is well poised to achieve back-ended growth on the back of strong pipeline of 25 deals of more than $50 million.
Moreover the company intends to add 30,000-35,000 employees, which clearly gives the revenue visibility.
At the current market price, TCS is trading at attractive valuation of just 12.5x FY2010 estimated earnings. We maintain our BUY recommendation on the stock with price target of Rs1,121.