2 Tata Group stocks get a BUY call with an upside of up to 23%; Do you hold them?

The benchmark index NIFTY 50 ended in the red at 17,100.05 points for the week losing 318.7 points or 1.83%. Similarly, the 30-stock BSE Sensex closed at 57,989 points, down 2.01% or -1,186.57 on a weekly basis. 

Investors closely follow the Tata Group stocks for any developments. This week, two Tata Group companies came into the news: Tata Consultancy Services (TCS) Ltd. and Voltas Ltd. 

Tata Consultancy Services (TCS) Ltd. 

IT giant Tata Consultancy Services (TCS) took Dalal Street investors by surprise on Thursday. The crown jewel of the Tata Group announced that Rajesh Gopinathan has resigned as the CEO of the company. K Krithivasan will serve as the new CEO gradually going through the transition. 

Commenting on the development, the analysts at the domestic brokerage firm Centrum Broking said, “Rajesh Gopinathan was re-appointed as CEO last year and therefore his resignation is a surprise and likely to be perceived negatively.” 

The brokerage further added, “However, Krithivasan’s expertise in the BFSI space as well as the internal promotion of a TCS veteran who has worked closely with the outgoing CEO for over 2 decades, should help TCS from a long-term perspective.” 

The stock of the company closed at Rs 3,175 per share on Friday giving it a market capitalization of Rs 1,163,000. 

The brokerage firm ICICI Securities has given a target price of Rs 3,834 on the stock of TCS, signalling a potential upside of 21% for the investors of the company. 

Voltas Ltd. 

Universal MEP Projects & Engineering Services (UMPESL), a subsidiary of Voltas Ltd. communicated on Thursday that it has received multiple SITC project orders worth Rs 1,770 crore in FY23. These projects will form part of the electrical power distribution division of the company. 

Pradeep Bakshi, MD & CEO of Voltas & MD of UMPESL said on the development on the development, “The power distribution contract is expected to create new jobs and boost economic growth in the region as well. It will also ensure last-mile electrification in remote areas, promoting ease of living the business development.” 

The international brokerage firm Nomura is particularly bullish on this Tata stock. 

Its analysts wrote in a report, “Over the longer term, we expect AC industry growth visibility to remain high due to low penetration levels and latent demand (high average temperatures). Competitive intensity remains unsustainable and operating leverage/price hikes will likely be margin tailwinds for FY24F.”

On the back of expected price hikes in April, Nomura analysts have given a ‘buy’ rating on the stock with a target price of Rs 1,083 per share. This translates to an impressive 23% upside for the investors from the Friday closing price of Rs 880. 

Written by Vikalp Mishra

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