Tata Consultancy Services (TCS) stock started its trading session at Rs 3,210 thereby staying in the red today with a downfall of about 2 percent and currently trading at a price of Rs 3,190.
Tata Consultancy Services, based in Mumbai, is a global leader in IT services providing consultancy & business solutions supported by a large network of innovation & delivery centers.
The company leverages its offshore outsourcing model and derives nearly half of its revenue from the North-American segment. The company has made significant investments in Digital platforms and products scattering across Technology Products, Horizontal and Vertical Platforms and Products, etc.
Having a quick glance at the financials after collating the recent Q4 results of the company, the revenues and net profit figures have reported decent growth with revenues increasing from Rs 58,230 crores in Q3 to Rs 59,160 crores in Q4 and net profits improving from Rs 10,880 crores in Q3 to Rs 11,435 crores in Q4.
In addition, the profitability metrics of the company have also shown a positive movement with ROE going up from 44.13 percent in FY21-22 to 47.26 percent in FY22-23. The ROCE figures shifted from 60.22 percent in FY21-22 to 64.44 percent in FY22-23. Moreover, the return on asset (ROA) percentages have gone up from 29.06 percent during FY21-22 to 30.42 percent in FY22-23.
According to the data available for the quarter ending December 2022, promoters hold a 72.3 percent stake in the company and FIIs holding a 12.94 percent stake.
After the Q4 results, Motilal Oswal came up with a ‘Buy’ recommendation on the stock with a target price of Rs 3,860 indicating an upside of around 21 percent as compared to the current price levels.
The rationale behind giving such a recommendation on the stock is its order book and long duration of orders and portfolios maintained by the company. Another one pertains to the industry-leading margin ratios reported by the company making them well-positioned to withstand the weakening macro environment.
Written by Amit Madnani
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