Shares of Tata Consultancy Services (TCS) traded higher on the BSE in early deals on Tuesday after India’s top IT company’s Q2 FY23 results came in ahead of revenue, margin and profit estimates and stabilized at $8.1 billion in deal wins. Slightly up on BSE.
TCS, the largest IT services exporter, on Monday reported a growth of over 8% in its net profit for the September quarter. 10,431 crores. Reporting quarter saw revenue up 18% 55,309 crore as against 46,867 crore in the year-ago period, but it was down 1.60 percentage points in operating margin to 24%.
What is the brokerage on TCS shares
“Deal winnings were steady at $8.1bn, but higher sub-contracts coupled with lower net hiring reflect management’s caution amid uncertain macros. We keep our FY23-25 estimates for INR depreciation against USD at 2-5% and expect TCS to deliver 12% EPS CAGR in FY22-24. Premium valuation of TCS may be limited on the upside,” global brokerage Jefferies said while maintaining hold rating tcs share with a revised target price of 3,180 per.
“TCS reported quarterly performance largely inline. Reported earnings for the USD were impacted by cross currency headwinds. There was a gradual improvement in EBIT margin (up 91 bps QoQ) due to improvement in employee pyramid and other efficiency measures. “LTM attrition has increased from 180 bps QoQ to 21.5%, hence employee attrition remained high,” Yes Securities said. The brokerage has changed its rating on IT Stock from Buy to Add with revised target price. 3,536 per share.
“TCS is taking some caution to long-term deals and is experiencing some delayed decision making in Europe, but it is seeing a strong spending environment in the US. While we remain concerned about Q3 margins due to the cost optimization timeline, the easing of supply conditions in 2HFY23 as well as benefits from new additions over the past few quarters and lower sub-contractor costs should support margins Should,” according to Motilal Oswal, buy the tag with a target price of 3,580.
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