The shares of India’s largest IT company gained 2 percent to ₹4,087.50 per share after UBS upgraded the target price with an upside of 15%.
At 11:20 a.m., The shares of Tata Consultancy Services Ltd were quoted at ₹4,080 per share, up 1.98 percent from the previous close price. The company has a market capitalization of ₹ 14,76,234 crores.
Tata Consultancy Services is engaged in the business of IT services, consulting, and business solutions. The company offers a consulting-led, cognitive-powered, integrated portfolio of business, technology, and engineering services and solutions.
The company’s revenue has increased by 4 percent yearly, from ₹58,229 crore in Q3FY23 to ₹60,583 crore in Q3FY24. In the same time frame, net profit has jumped by 2 percent from ₹10,883 crore to ₹11,097 crore.
Tata Consultancy Services Ltd. shares have delivered a return of 20 percent in the last six months and 23 percent in a year.
The Company’s return on equity increased from 42.99% in FY22 to 46.61% in FY23, while the return on capital employed rose from 52.91% to 57.63% during the same period.
UBS upgraded a target for Tata Consultancy Services. The brokerage has revised a target from ₹4,000 to ₹4,700 per share, representing an upside of 15 percent from Tuesday’s trading price of ₹4,080 per share.
UBS expects the company’s revenue growth to increase by 100-150 basis points of margin improvement in the next four to six quarters.
The brokerage suggests that the market is undervaluing the company’s competitive advantage over its peers due to a lack of consensus. According to the brokerage, the stock is currently positioned at the lower end of its long-term trading premium when compared to its industry counterparts.
The brokerage expects TCS to deliver 8.8 percent year-on-year (YoY) US$ revenue growth in FY25, outperforming its peers’ 3.6–8.2 percent.
UBS highlights several factors propelling TCS’s growth, such as the acceleration of major contracts like BSNL, NEST, Aviva, resurgence in the banking, financial services, and insurance (BFSI) sector, ongoing cloud migration initiatives, and sustained robust demand for managed services across the industry.
Written by Omkar Chitnis
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