Tata Consultancy Services, the biggest cash cow for Tata Sons opened the fourth-quarter earnings season by earning a net profit of ₹9,926 crores, a growth of 7.35% year-on-year (YoY).
The numbers met the estimates at the D-Street and the company’s shares rose nearly 1% on Tuesday. However, its share price has fallen during the last five days and the shares are currently trading at ₹3532.90 levels, down 3.56%.
Here’s what experts have to say about the stock
Motilal Oswal
The brokerage has maintained a ‘Buy’ rating on the shares of the company with a target price of ₹ 4,240 apiece.
“TCS has consistently maintained its market leadership position and shown best-in-class execution. This renders the company with ample room to maintain its industry-leading margin and demonstrate superior return ratios,” the brokerage said in a note.
Jefferies
They said that TCS’ premium valuation over Infosys, despite slower growth, may limit the upside. Therefore, they have maintained a ‘Hold’ rating on the shares with a revised price target of ₹ 3,925.
They highlighted that TCS’ profits stemmed mainly from higher than expected revenues despite strong headcount additions and a rise in subcontracting costs.
ICICI Securities
The brokerage has reiterated its ‘hold’ rating on the shares of the company due to slowing earning growth and elevated PEG ratios. It has given a price target of ₹ 3,719.
Emkay Global
It has a buy call on Tata Consultancy Services with a target price of Rs 4000 with a time period of one year. According to them, TCS is well poised to benefit from strong demand and growing digital transformation opportunities.
HDFC Securities
According to the brokerage, TCS has gained market share and the demand buoyancy was reflected in TCS’ headcount addition (net). Further, medium-term drivers such as prioritization of tech budgets, strong execution framework (including high retention) and services breadth including industry platforms remain intact.
HDFC Securities has given an ‘Add’ rating on the stock, with a target of ₹ 4,210.
IDBI Capital
The brokerage has maintained a ‘Hold’ rating on the stock, with a revised price target of ₹4,035 apiece.
It expects supply-side challenges, wage hikes, higher travel and facility cost to impact near term margins. However, it believes that the demand continues to be robust, led by cloud migration and ancillary technologies.
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