Tata Consultancy: Deal Flow Still Strong Despite Project Delays; Lifting Fair Value to INR 2,960

Wide-moat Tata Consultancy Services reported fourth-quarter results that came in slightly under our expectations. While delays in projects are causing near-term revenue weakness, we’re encouraged by overall deal activity that we believe bodes well for the long run. We think overall deal health is likely not specific to TCS, as we expect peers Infosys and Wipro are experiencing the same. Leaving earnings results with more reassurance while factoring in uncertainty, we are increasing our fair value estimate for TCS to INR 2,960 from INR 2,840. We view TCS as fairly valued, as the company trades near INR 3,210 upon results.