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The eminent IT company collapsed in market chaos and suffered the worst m-cap drop among Sensex companies. The m-cap of the computer science major is at Rs. 1,130,244 crores.
The company combines technological expertise and business intelligence to catalyze change and produce results. While it has fallen on a YTD basis by 17% and over 23% from its record price of Rs. 4043 until the last trade at Rs. 3088.9, its fundamentals are largely intact. That said, we mean that valuations are now improving. For the TCS, the TTM P/E is 29.49. Additionally, the company is a cash-rich company that regularly pays dividends. For Fy22, the company announced a total of Rs. 43 per share as a dividend in 4 tranches.
Continuous improvement of the company’s finances
Revenue and net income for FY22 increased on an annual basis to Rs. 1,95,772 crore and Rs. 38,327 crore. Additionally, the EPS for the certificate fell from 86.19 in fiscal 2020 to 104.18. Higher EPS indicates greater value because investors will pay more for a company’s stock if they believe the company has higher earnings relative to its stock price.
Furthermore, the company’s free cash flow is on an upward trajectory, being reported at Rs. 36,969 crore in Fy22.
Inflation threatens IT exports to the United States, but the Middle East offers opportunities
Thus, while the recessionary trend is expected in a context of massive monetary tightening, IT companies are threatened, because their main clientele is made up of American companies. Nevertheless, the digitization frenzy in other parts of the world, including the Middle East, could be well exploited by Indian IT companies.
“This has created a wave of demand in AI, robotics, cloud, cybersecurity, data analytics and other digital technologies. Governments are tackling this gap between supply and demand with a very structured approach, responding to immediate needs through extremely talent-friendly policies and significant investment in academic institutions to nurture local talent for the future,” said Rajiv Kumar, Head of Human Resources for the Middle East and Africa, to the Nasscom delegation.
The household and personal products company has been present for almost a century in the country. The economic situation does not affect the demand for products that the company mainly offers. tea, coffee, ice cream and frozen desserts, health foods and drinks, the company is part of the daily lives of millions of consumers across India. Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf excel, Rin, Wheel, Glow & Lovely, Pond’s, Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Simple, Love Beauty Planet , TRESemmé, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s, Horlicks and Pureit.
Financial: The company’s sales for the financial year 2022 were Rs. 52,887 crores. The company’s net income also shows year-on-year gains from Rs. 6,054 crore in FY2019 to Rs. 8,879 crore in Fy22.
The company is once again a debt-free business, down nearly 26% from its all-time or 52-week high price of Rs. 2859.3 until last traded at Rs. 2110.45.
Better positioned among its peers on both the technology and e-commerce front
Motilal Oswal is betting on the stock for a target price of Rs. 2,700 and mentions that the company “continues to build on key drivers of its success in India over the past decade including: pioneering use of technology to generate data and facilitate decision-making; focus on decentralization and localized strategies based on its WiMI framework; recognize trends and invest in them early on; feed cost savings back into the business; and its strong execution capability, which led to positive earnings momentum.
Hindustan Unilever is best positioned among its peers on the technology as well as the e-commerce strategy front to weather the potentially significant disruptions ahead,” the brokerage notes.
Stocks are discussed for their defensive stance and good financial, fundamentals, but don’t take stocks as a recommendation to advise them.