TCS Shares Jump After Strong Q4: What Are Brokerages Saying

TCS’s share price leapt on Monday morning as the company’s earnings for the March quarter impressed analysts and investors.

What Happened: India’s biggest IT firm’s net profit for the quarter ended March was at ₹12,434 crore, up 9.4% from the ₹11,392 crore reported in the same quarter last year. This was higher than street estimates of around ₹12,000 crore. Revenue witnessed a 3.5% year-on-year growth at ₹61,237 crore. During the March quarter, TCS secured contracts totalling $13.2 billion, marking an increase from the $8.1 billion posted in the previous quarter.

Analysts Reactions: JP Morgan upgraded the stock’s rating to “overweight” raising the price target to ₹4,500 from ₹4,000. The brokerage said that the company’s March quarter numbers surprised on margins and deal wins.

Goldman Sachs also maintained its “buy” rating for the stock with a price target of ₹4,350. The brokerage said that the probability of the company posting double-digit earnings growth in FY25 is increasing. The analysts see the IT giant’s revenue growing by around 8% for the year ending March 2025.

Morgan Stanley also maintained its “overweight” rating for the stock with a target price of ₹4,350. The analysts said that the company’s results and commentary were mixed but margins were a surprise. The analysts highlighted that international revenue growth in the quarter was subdued, but the Indian business helped the numbers.

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Motilal Oswal also maintained its “buy” rating for the stock with a target price of ₹4,600. The brokerage said that given its substantial size, robust order book, and exposure to long-duration orders, TCS is well-positioned to navigate through a weakening macro environment.

HDFC maintained its “add” rating for the stock with a target price of ₹4,500. The brokerage said that IT major remains its top pick in tier-1 IT. “While TCS' revenue growth was along expected lines in Q4, it
pushed the envelope on deals and operating performance,”. the analysts added.

CLSA, on the other hand, maintained its “underperform” rating on the stock reducing price target to ₹3,941 from ₹4,043. The brokerage said that the strong order book was not enough to drive up management optimism. The analyst also said that the company’s BFSI, hi-tech, communications/media segment remained suppressed.

IDBI Capital also maintained its “hold” rating for the stock but raised the price target to ₹4,300 from ₹4,000. The brokerage said that the company’s bottom line was above street estimates. The analysts also highlighted that the company bagged some mega deals which is expected to ramp up in FY25.

Price Action: TCS’s share price was up 1.13% to trade at ₹4,046.55 as the markets opened on Monday.

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