Stock Tips: After the announcement of financial results for the July-September 2021 quarter last week, today on October 11, there was a tremendous sell-off in the shares of TCS (Tata Consultancy Services), the country’s second largest listed company. In the early trade today, the company’s shares fell nearly 7 percent in intra-day, while the domestic equity benchmark index Sensex has reached near record highs. TCS prices fell to a low of Rs 3660 per share today.
On Friday, the last trading day of last week, TCS announced the financial results for the July-September 2021 quarter. The company’s consolidated net profit grew by 29 per cent in the previous quarter. Apart from this, the company has also approved an interim dividend of ₹ 7 per share to its shareholders.
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One lakh crore fall in market cap
The giant IT company had a net profit of Rs 9624 crore in the last quarter. Apart from this, the revenue of the company also increased by 16.8 percent to Rs 48,867 crore. The company’s EBIT (earnings before interest and tax) increased to 25.6 per cent in the previous quarter July-September 2021 from 23.2 per cent in the same period last year. Talking about the share price, the shares of this company have strengthened 27% this year. However, due to the selling of about 7 percent today, its market cap has come down to one lakh crore rupees. Its market cap was Rs 14.55 lakh crore at the close of business on Friday last week, after the sell-off today its market cap was reduced to Rs 13.7 lakh crore.
Buy or sell this is the advice of experts
Motilal Oswal – Neutral
Target price – Rs 3,770
According to an analyst with brokerage firm Motilal Oswal, the growth in revenue of TCS remained as expected, but in terms of US dollar, its performance was less than expected. According to the brokerage firm, the company’s shares may show pressure in the near term due to non-performance and soft margin outlook in the second quarter.
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PhillipCapital – Buy
Target price – Rs 4,580
According to brokerage firm PhilipCapital, the last quarter was moderate for TCS but investors are not looking very encouraging. However, according to Philip Capital, its performance can be better in the coming quarters. It is expected to outperform large cap peers on the back of strong diversified profile, better returns, stable management and leadership position in the market.
Box Securities – Add
Target price – Rs 4,100
According to analysts at Kotak Securities, the company’s growth in Europe was surprisingly moderate, due to which its financial performance in the last quarter was not as per expectations. However, the brokerage firm believes that the company’s performance may remain better in the coming quarters. Kotak Securities has retained the ad rating for its shares. According to analysts, it is more capable of dealing with any challenge than Pierce.
Yes Securities – Buy
Target price – Rs 4,395
According to analysts at brokerage firm Yes Security, TCS maintained its margin operating margin even in tough times. There is a positive trend regarding revenue and margin outlook due to increase in deal booking and increase in the share of digital revenue.
(Article: Kshitij Bhargava)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)