Analyst Jonathan Woo of Phillip Securities maintained a Buy rating on TDCX (TDCX – Research Report), with a price target of $8.60.
Jonathan Woo has given his Buy rating due to a combination of factors related to TDCX’s financial performance and strategic positioning. Despite a significant revenue decline from TDCX’s top two clients, the company has shown resilience with a 2% Year-on-Year (YoY) increase in Profit After Tax and Minority Interests (PATMI), supported by lower employee expenses, reduced tax expenses, and a substantial increase in interest income. Additionally, TDCX’s performance was boosted by healthy revenue growth from smaller clients across various sectors, indicating diversification and potential for growth beyond its largest clients.
Moreover, the company has successfully expanded its net margins, thanks to cost reductions and higher interest income on its strong cash balance. With around 45% of its market capitalization in cash, TDCX is in a robust financial position, generating positive cash flows. Despite reducing the growth rate forecast and target price to reflect the uncertain contribution from its top clients, Woo maintains a Buy rating, recognizing TDCX’s ongoing profitability, its expanding client base in lucrative verticals, and the company’s ability to adapt to changing business volumes.
Woo covers the Communication Services sector, focusing on stocks such as Meta Platforms, Alphabet Class A, and Netflix. According to TipRanks, Woo has an average return of 8.2% and a 69.23% success rate on recommended stocks.
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TDCX (TDCX) Company Description:
TDCX Inc provides outsourced contact center services. Its business comprises three key service offerings: omnichannel CX solutions; sales and digital marketing services; and content monitoring and moderation services. It also provides other services for clients, such as providing workspace at its offices in connection with existing campaigns and providing human resource and administration services to clients.
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