TDCX Inc. Spending weakness to continue January 31, 2023 414

PSR Recommendation: ACCUMULATE Status: Downgraded
Target Price: 14.80
  • We cut our FY23e revenue forecasts by 6% to S$765mn (15% YoY) to reflect a continued pullback in spending by tech companies. Similarly, we also cut our FY23e PATMI forecasts by 5% to S$130mn (20% YoY).

  • We expect FY23e adjusted EBITDA (excluding stock-based compensation) to be S$235mn, with adj. EBITDA margin of around 31%, similar to FY22e levels.

  • We downgrade to ACCUMULATE with a reduced DCF target price of US$14.80 (prev. US$15.50), a WACC of 10.4%, and a terminal growth rate of 3.0%.
 

Downgrade ACCUMULATE with a reduced target price of US$14.80

FY23e revenue growth of 15% YoY is still the fastest amongst CX peers, with the average around 8-10%.  Adj. EBITDA margins of ~31% are similar to FY22e levels, and in line with the company’s expectations as it continues expanding geographically. We downgrade to ACCUMULATE with a reduced DCF target price of US$14.80 (prev. US$15.50), a WACC of 10.4%, and a terminal growth rate of 3.0%.

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About the author

Profile photo of Jonathan Woo

Jonathan Woo
Research Analyst
PSR

Jonathan covers the US technology sector focusing on internet companies. Formerly a national and professional athlete, he graduated from the University of Oregon with a Bachelor’s Degree in Social Sciences.

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