In addition, the analyst lowered his target price to US$14.80 ($19.43), down from $15.50 previously. The reduced target price is based on a weighted average cost of capital (WACC) of 10.4% and a terminal growth rate of 3.0%.
Despite the downgrade, Woo notes that the company’s estimated revenue growth for the FY2023 ending Dec 31, at 15% y-o-y, is still the fastest among TDCX’s customer experience (CX) peers with an average of around 8% to 10%.
The company’s adjusted ebitda margins of around 31% are similar to that of its FY2022 levels and in line with the company’s expectations as it expands to other markets.
Shares in TDCX closed US$1.54 lower or 10.81% down at US$12.70.
