Tata Reports an Expectedly Tough 1Q but Already Preparing for the Rebound; Shares Overvalued

Tata Consultancy Services reported sluggish results to kick off its fiscal 2021, with broad-based revenue declines coming in a quarter management previewed as the trough of COVID-19 business disruption. While fiscal 2021 looks to be a sluggish year compared with the firm's history of robust and enduring growth, we think its long-term prospects remain promising as businesses require faster digital transformation in a new working landscape. We are maintaining our INR 1,460 fair value estimate for narrow-moat Tata and view shares as overvalued.