Target Price: Rs4000
* Q4FY22 operating performance was broadly in line with our expectations. Revenue grew by 3.2%/14.3% QoQ/YoY in CC terms. EBITM remained flat QoQ at 25% due to supply-side challenges, partly offset by operating efficiencies and favorable currency movement.
* Revenue growth was broad-based with double-digit CC YoY growth across the verticals. Growth was led by Retail & CPG (22.1% CC YoY), Manufacturing (19%), Communication and Media (18.7%), Technology & Services (18%), Life Sciences & Healthcare (16.4%) and BFSI (12.9%).
* Management remains confident of sustaining revenue growth momentum in the coming quarters on the back of a robust demand environment, strong deal intake (USD34.6bn in FY22), and broad-based growth.
* We largely retain our EPS estimates for FY23/FY24 (<1% change) after factoring in FY22 performance. TCS is well poised to benefit from strong demand and growing digital transformation opportunities, although salary inflation and potential slowdown in Europe remain near-term concerns. We maintain Buy with a TP of Rs4,000 at 28x Mar'24E EPS.