Shares of TCS dropped over 5% on the NSE today. About 2.84cr shares or 1.5% equity changed hands in six block deals, as per media reports. The stock was the worst performer on both Sensex and Nifty.
Tata Sons, which owned 73.5% of TCS as of end-December, sold TCS shares in a price range of Rs2,872 to Rs2,925 each, the report stated.
The stock is currently trading at Rs2,906.50, down by Rs145.35 or 4.76% from its previous closing of Rs3,051.85 on the BSE.
The scrip opened at Rs2,928 and has touched a high and low of Rs2,929 and Rs2,885.20 respectively.
TCS is among world’s top 10 IT companies deriving ~32% of its revenue from BFSI vertical. Retail and CPG contribute 12.5% to TCS revenue, while communication & media, life sciences & healthcare, manufacturing and technology contributed 7-8% each to its revenue. The company is witnessing increasing traction in digital business where it signed its first USD50mn+ deal in Q3FY18. TCS’s deal momentum remains strong as exhibited in the largest ever (USD2bn) deal signed with Transamerica and USD690mn+ deal signed with Prudential (for Diligenta).
We believe that over the next few quarters, TCS can exhibit superior integration capabilities and grow the base of its digital revenue, which will offset lack of growth in traditional revenues. Moreover, it has shown turnaround in all verticals except BFSI, which should do well post CY18. Owing to better realizations and utilizations, we expect revenue and PAT CAGR of 9.5% and 12.4% respectively over FY18-20E.