TCS gains 1.5% as it bags $1.5 bn contract from Walgreens Boots Alliance

Tata Consultancy Solutions (TCS) attained in excess of one.five per cent on Tuesday following the company reported it has bagged a $one.five billion (about Rs 10,650 crore) agreement from pharma company Walgreens Boots Alliance, spread in excess of a period of 10 decades. Underneath the agreement, TCS will present managed expert services including application maintenance and guidance, expected infrastructure and stability operations.

At 09:45 am, the stock was trading .22 per cent increased at Rs two,108 apiece on the BSE, consequently paring its early trade gains. The S&P BSE Sensex, on the other hand, was trading 406.50 points or one per cent increased at 40,279 amounts. The stock strike a substantial of Rs two,137.fifty five, up one.63 per cent versus Monday’s shut of two,103.fifteen.

“WBA is making a scalable, sustainable and globally unified lT working product that is focused on digital transformation, automation of services shipping and delivery and innovation,” reported Francesco Tinto, senior vice president, world wide chief information officer, WBA. “The TCS strategic partnership will enhance our means to fast address evolving business demands, guidance substantial-scale world wide technological know-how options and encourage financial commitment in really differentiating capabilities as a result of a modernized platform.”

“We are delighted to construct on our extended-standing marriage with WBA and allow its advancement and transformation,” reported Ashish Khurana, Head, Retail lndustry Methods, TCS. “We will leverage our contextual understanding of WBA’s business ecosystem to harness the electric power of digital systems to streamline and scale-up their lT operations, even though helping accelerate transformational initiatives that enhance the customer knowledge,” Khurana added.

Prabhudas Lilladher, in its observe, reported this is the greatest deal in retail announced as of now by TCS. Retail accounts to fifteen per cent of TCS revenues. The brokerage thinks that TCS advancement is dependent on two crucial verticals- financial services and retail. In financial services, TCS has received a collection of new logos and substantial specials. Demand from customers is also powerful across geos and numerous segments these kinds of as retail banking, mid-tier banking companies and insurance coverage.

“TCS is a leader in the world wide IT expert services room with the most constant system and execution resulting in market place share gains and advancement across cycles. We hope TCS to provide 7.five per cent income CAGR & EPS CAGR of eight.two per cent in excess of FY20E-22E,” the brokerage reported.

The brokerage maintains its estimates and the concentrate on price of Rs two,106 (valued at 21.5x) Sep-21 earnings. TCS is now trading at 22.4X/20.6X for FY21E/22E EPS of Rs. 22.four/20.six respectively. It has taken care of ‘HOLD’ ranking on the stock.