TCS shares fall on lower-than-expected Q4 profit Should you buy/hold?

script But was trading with a decline of 1.28 percent 3,200.00 per share on the NSE.

quarterly Net Profit rose to 14.8 percent 11,392 crores. analysts estimate 11,530 crores on an average.

Its January-March order book stood at $10 billion, down 11.5 percent from a year earlier but with an “all-time high number of large deals”. For the current quarter, TCS estimates a range of $7 billion to $9 billion.

Revenue from operations grew nearly 17 percent.

TCS is the first among its peers to report quarterly earnings, setting the tone for an industry that is also facing a slowdown in its key markets – the US and Europe.

Here’s what brokerages recommend on TCS shares after Q4 results

The brokerage did not share a very bullish comment as TCS said its fourth quarter results were weaker than expected.

nuwama

While near-term uncertainty looms large due to weak global macros, brokerage Nuwama Institutional Equities already prices it in, and remains positive on the IT sector as demand environment remains strong – confirmed by strong deal inflows it occurs.

TCS will be one of the biggest beneficiaries of this demand in the medium to long term, said Nuwama, with a target price of ‘Buy/SO’ from 3,750 4,100 earlier.

On balance, Nuwama said it has reduced FY24/25E EPS to 1.3 per cent / 0.3 per cent. It yields FY25E PE at 25 times valuation rollover (from 30 times FY24E PE).

MK

Emkay Global has revised its earnings estimates for FY24-25 (cut 0-1.5%) following FY23 performance. The brokerage maintains ‘Hold’ with a target price of 3,300 per share at 22 times Mar-25E EPS.

What the brokerage liked: Healthy deal intake (TCV of USD10bn; book-to-bill of ~1.4x), reduced attrition (20.1% vs 21.3% QoQ). What the brokerage didn’t like: Missed out on operational performance.

The views and recommendations given above are of individual analysts or broking companies and not of Mint,