Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting January 13, 2025) are Tata Consultancy Services (TCS) and Coal India Limited. Let’s take a look:
TCS:
TCS is transitioning from cost-saving deals to application modernization, cloud, and Gen AI initiatives, with improving revenue productivity. FY26 outlook is positive, with a recovery in discretionary spending, shorter deal cycles, and a strong US economy driving growth.
TCS reported Q3FY25 revenue of USD7.5b, with a strong deal TCV of USD10.2b (+18.6% QoQ), signaling a recovery in discretionary spending. EBIT margins improved to 24.5%, driven by operational efficiencies. Growth led by India and MEA, offsets decline
We are expecting a USD revenue CAGR of 6.0% and INR EPS CAGR of 9.3% over FY24-27E, led by strong deal wins and operational efficiencies support growth.
Coal India:
COAL, holding a dominant 77% mkt share in India’s coal production, is well-positioned to benefit from the projected rise in power demand, expected to grow in tandem with GDP in the near future. Currently, thermal power accounts for ~75% of power generation (with 45% share in installed capacity). Govt plans to add 80GW of thermal capacity in India by FY32 to meet a 283GW base load. COAL’s production is expected to grow at a 6% CAGR from FY24-27, driven by increasing power demand, with a 15% share of e-auction dispatches, favourable e-auction premiums & cost efficiencies enhancing growth prospects.
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