Stock Tips: The market has remained volatile for the past few days. However, in the case of individual stocks, after the announcement of TCS’s financial results for the September 2021 quarter, its price declined a business day ago. However, market analysts believe that this is a buying opportunity in TCS as it has better growth prospects. . At the same time, Piramal Enterprises also sees a golden opportunity for investment as after the acquisition of DHFL, it has announced de-merger of its business, which has also been approved by the board.
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- In the second quarter of the current financial year, July-September 2021, the revenue of TCS grew as expected, but in dollar terms, it was contrary to expectations. In the last quarter, the revenue of the IT company grew by 4 per cent on a quarterly basis. Although revenue growth was estimated at 3.7 per cent on a quarterly basis in dollar terms, it was only 2.9 per cent. Vibration’s EBIT margin also rose 0.1 per cent to 25.6 per cent on a quarterly basis, but could not meet the 26.2 per cent estimate due to supply concerns. In the September 2021 quarter, the company’s net profit (Profit After Tax) increased by 6.9 percent on a quarterly basis to Rs 9700 crore.
- TCS won deals worth $7600 million in the September quarter, which was 6 per cent lower than the June quarter. Barring the mega deal, the company’s performance in securing deals has been better. Barring a mega deal in the second quarter of FY21, the company won 25 per cent more deals in the September 2021 quarter.
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- There is a huge potential for growth in demand as the use of technology is increasing rapidly. Apart from this, cloud adoption is also in its early stages as only 20-30 per cent of workloads have been able to migrate to the cloud.
- According to the company’s management, the supply-related problems may persist for the next 2-3 quarters. However, the current challenges can be expected to normalize in the medium term.
- According to brokerage firm Motilal Oswal, TCS has a strong growth potential. However, due to poor performance in the second quarter and a soft margin outlook, the company’s shares may see pressure in the near term. The brokerage firm has cut its estimate of earnings per share of the company by 2 per cent for FY 2022 and 4 per cent for FY 2023. The brokerage firm has fixed the target price at Rs 3770 per share while retaining its neutral rating.
- Following the acquisition and integration of DHFL, Piramal Enterprises has announced demerger of its pharma business and simplification of corporate structure. The plan of demerger of the company as two separate listed companies has also been approved by the board. As per the plan, Piramal Enterprises
- Will separate the financial business and the pharma business. However, the scheme is yet to get shareholders, creditors and regulatory approvals. This whole process may take 9-10 months.
- The demerger will strengthen the business of the company as both the listed companies will have separate boards and management teams. Both the companies formed from the de-merger will be able to adopt a better growth strategy independently.
With the acquisition of DHFL, Piramal Enterprises will benefit from its network.
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- Shareholders of Piramal will get 4 equity shares of Piramal Pharma for one share. Shareholders will get direct stake in both the listed companies without any cross holdings and minority stakes. Both the companies will be listed on NSE and BSE.
- Brokerage ICICI Securities has given hold rating to the shares of Piramal Industries and has increased its target price of Rs 2797 to Rs 2933.
(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.)