The Tata Consultancy Services Ltd (TCS) story seems to be losing its sheen. Soon after the financial crisis, the firm grew revenue, profit and cash flow at an impressive rate, which had led to a huge re-rating of its shares. And after years of trading at a discount, the TCS stock has been trading at a premium compared with Infosys Ltd for the past 15-18 months.
But now, some analysts are questioning its valuation premium. Bhuvnesh Singh and Vaibhav Dhasmana of Barclays Securities (India) Pvt. Ltd wrote in a 21 March note to clients, “TCS’ valuation premium to Infosys has largely been on account of its higher revenue growth expectations. However, with growth for the past two quarters for both companies being similar, we believe there is a strong reason for this premium to disappear.”
Saket kumar
Pgdm2ndsem.
Pg,11,42
Saket kumar
Pgdm2ndsem.
Pg,11,42
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