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Friday, January 28, 2022

TCS Outlook: TCS prices up 2% after quarterly results; Market experts expressed the possibility of 30% increase, check target price

TCS Outlook: After the announcement of the quarterly results of the country’s largest IT company TCS, its shares have strengthened more than 2 percent today (January 13). Its prices reached near the record high of 52 weeks.

TCS Outlook: After the announcement of the December 2021 quarter results of the country’s largest IT company TCS, its shares have strengthened more than 2 percent today (January 13). Its price reached Rs 3944.40 on BSE, which is close to the 52-week record price of Rs 3990. The company’s consolidated net profit grew 12.36 per cent year-on-year to Rs 9,769 crore in the December quarter. Apart from this, the company has also announced an interim dividend of Rs 7 per share and the company will buyback shares worth Rs 18 thousand crore at the rate of Rs 4500 per share. Brokerage firms have advised investors to buy its shares. There is a possibility of an increase of 30 percent in its price.

TCS Q3 Result: 12% increase in profit of country’s largest IT company, announcement of interim dividend of Rs 7

Prabhudas Lilladher: Buy
Target price: Rs 4,468

Research firm Prabhudas Lilladher has given a buy rating to TCS. Analysts believe that in the current circumstances, where supply growth is more important than demand, TCS’s lower attrition as compared to Pierce is an advantage for the company. According to Prabhudas Lilladher, TCS can easily maintain an EBIT margin of 26 per cent in FY2023 despite pressure on supply side costs and return on expenses. Due to supply-side pressures, the company has a good margin expansion potential through sub-contracting costs, improved pricing, pyramid optimization, best-in-class supply side engine and leverage from revenue growth.

Kotak Institutional Equities: Add

Research firm Kotak Institutional Equities has retained the ad rating of TCS. The research firm believes that TCS is better positioned than its peers to address margin-related challenges as it is rapidly moving towards digital transformation of its clients i.e. better supply side management. Kotak has increased the revenue and EPS (earnings per share) estimates of TCS by 1-3 per cent for the financial year 2022-24.

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Motilal Oswal Financial Services: Buy
Target price: Rs 4,250

Research brokerage firm Motilal Oswal Financial Services believes that the company’s growth is going to continue well and is in a better position to increase market share through small deals. Based on TCS’s size, capability and portfolio stretch, the giant is well positioned to take advantage of industry growth.

Edelweiss Research: Buy
Target price: Rs 5,000

Research firm Edelweiss believes that the company’s profits and margins in the December 2021 quarter were lower than expected, while the growth in revenue was higher than expected. Analysts of Edelweiss believe that its prices may further strengthen by 30 percent. According to analysts, the demand for core transformation is going to remain strong and TCS is moving fast in this direction, which gives more scope for the company’s earnings growth.

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Emkay Financial Services: Buy
Target price: Rs 4,150

According to research company Emkay Financial Services, the company’s revenue growth was higher than expected but it missed the estimated margin. However, according to Emkay, the management is confident of growth in revenue on the back of strong demand and deals and cloud, IoT (Internet of Things) and digital engineering. According to the Emkay Global report, the management has anticipated that in the near term, managing the supply side challenges could impact margins.
(Article: Surbhi Jain)

(The stock recommendations given in the story are from the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.

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