Shares of Tata Consultancy Services (TCS) jumped over 3 per cent to the day’s high of Rs 3,860.25 on the NSE After the technology major reported better-than-expected Q3 performance. The IT technology services provider during the quarter ended December posted PAT at Rs 11,058 crore, which is a 2.5 per cent decline on a sequential basis. Nevertheless, PAT logged growth of 1.95 per cent on a year-on-year basis.
According to stock market experts, TCS share price is ascending today as the Indian IT major reported better-than-expected Q3 results 2024 on Thursday. TCS has managed to log profit despite a seasonally weak quarter buffeted by macroeconomic headwinds. However, they maintained that TCS Q3 results 2024 is better-than-expected but it’s not enough for the re-rating of the stock.
Revenue from operations inched 1.49 per cent higher on a quarter-on-quarter (QoQ) basis, while it grew 4.04 per cent year-on-year (YoY) to Rs 60,583 crore. Zee Business Research desk estimated revenue to come in at Rs 59,900 crore.
Morgan Stanley upgraded the stock to Overweight while raising its price target post the quarterly performance while Motilal Oswal and Nuvama reiterated their buy stance on the counter. Kotak Institutional Equities reiterated an ‘Add’ rating on TCS shares.
Morgan Stanley upgraded TCS stock to ‘Overweight’ from an earlier equal weight stance and hiked the price target to Rs 4,240 from 3,900. In its post-earnings stock review, the brokerage noted resilience in its revenues with its Earnings Before Interest and Taxes (EBIT) margin reaching the 25 per cent mark sooner than expected. The management commentary also turned slightly positive with indications of a likely pickup in growth rates, going ahead.
Though the stock underperformed its peers in 2023, its P/E is not cheap but the premium could be sustained if execution improves, the brokerage said.
Motilal Oswal has reiterated a buy stance on TCS with a target of Rs 4,250 after the company reported earnings which beat its estimates. This was despite demand constraints, it said.
Given its size, order book and exposure to long-duration orders and portfolio, TCS is well positioned to withstand the weakening macro environment and ride on the anticipated industry growth, Motilal said.
Owing to its steadfast market leadership position and best-in-class execution, the company has been able to maintain its industry-leading margin and demonstrate superior return ratios, the note said.
The current target implies 25X FY26E EPS with a 14 per cent upside potential.
Calling TCS’ Q3FY24 results solid, which were better than estimates, Nuvama reiterated a buy view on the counter for a target of Rs 4,500 which it revised upwards from an earlier target of Rs 4,400.
Nuvama highlighted management commentary which said that the macro environment was similar to the last quarter with the long-term demand environment remaining strong. It called out its BFSI vertical bottoming out.
“We upgrade FY24E/25E/26E EPS (+1.4 per cent/+1.4 per cent/+1.7 per cent),” the Nuvama note said.
Comments
0 comment