TCS: Views blended on TCS on weak Q3 margins

Mumbai: Brokerages have blended views on Tata Consultancy Providers after the IT main’s higher than anticipated December quarter revenues however missed margin estimates.

Whereas Credit score Suisse, Jefferies, Bernstein, Nomura, and BNP Paribas elevated their goal value for TCS, Goldman Sachs lowered it. JP Morgan and Morgan Stanley maintained their goal costs.

Whereas sustaining a ‘maintain’ score with a goal value of ₹4,180, Jefferies mentioned TCS’s wealthy multiples supply restricted scope for rerating relative to its progress. “The corporate recorded a wholesome progress; nonetheless, weak margins disillusioned,” the agency mentioned.

Morgan Stanley mentioned higher progress greater than offsets the margin miss. Income progress shocked after a spot of two quarters, which ought to drive some optimism in the direction of the inventory, it mentioned. Morgan Stanley sees room for valuations to maneuver up and has a goal of ₹4,400 on the inventory.

In accordance with Edelweiss, TCS delivered sturdy progress numbers, and the general pipeline stays strong. “We consider demand for core transformation stays sturdy, and this coupled with exemplary execution is more likely to drive sturdy earnings,” Edelweiss mentioned in a observe.

Motilal Oswal has maintained its optimistic stance on TCS, given its sturdy progress outlook. “We’re inspired by the strong topline progress in a seasonally weaker quarter. We count on this efficiency to alleviate the issues on its progress potential and the doubtless drag from rising share of smaller offers out there,” the brokerage mentioned, whereas decreasing its FY22 EPS by 2%.

Shares of TCS gained 1.05% to ₹3,897.65 on Thursday.