More negative triggers likely: REDUCE

We have one of only four REDUCE calls on the Street. FY09 USD revenue growth of 16.2% y-y among the lowest on the Street. TP 44% below Street.

Extensive checks suggest effect of worsening environment will start in 3QFY09; highest risk to estimates for TCS.
• Cutting TCS to REDUCE from HOLD, and FY09E and FY10E EPS by 2.4% and 4.8% despite weaker INR assumptions.
• TP: INR580 based on 0.72x FY08-10E PEG (one SD below historical mean), translates to FY09E P/E of 9.9x.

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