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Mixed views on TCS in weak third quarter

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Mumbai: brokerage Tata Consultancy Services has mixed views after better-than-expected revenue for the December quarter but missed margin estimates.

While Credit Suisse, Jefferies, Bernstein, Nomura, and BNP Paribas increased their target price For

, Goldman Sachs shortened it. JP Morgan and Morgan Stanley maintained their target prices.

While maintaining a ‘hold’ rating with a target price of ₹4,180, Jefferies said TCS’s rich multiples offer limited scope for revaluation relative to its growth. “The company recorded a healthy growth; However, weak margins disappointed,” the firm said.

Morgan Stanley said there’s better growth than miss margin. It added that revenue growth is puzzling after a gap of two quarters, which should lead to some optimism towards the stock. Morgan Stanley sees room for an upside valuation and has a target of ₹4,400 on the stock.

According to Edelweiss, TCS delivered strong growth numbers, and the overall pipeline remains strong. “We believe core transformation demand remains strong, and it has strong earnings potential with exemplary execution,” Edelweiss said in a note.

Given the strong growth outlook, Motilal Oswal has maintained a positive stance on TCS. The brokerage, while lowering its FY22, said, “We are encouraged by strong topline growth in the seasonally weak quarter. We expect this performance to offset potential pullbacks from its growth potential and increasing share of small deals in the market.” EPS 2%.

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


Hassaan Minhas

Hassaan is a journalist at and he deals with Latest News, India News, and Tech News. Hassaan is a very professional and authentic news journalist.

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