shares of Tata Consultancy Services (TCS) increased by about 2% The company’s net profit for the December quarter rose by 12.3% over a year ago to 3,934 on the BSE in early deals on Thursday. 9,769 crore on strong revenue growth of 16.3% 48,885 crores.
TCS said that strong growth over the past four quarters helped it generate revenue of $25 billion on a calendar-year basis. Board approved up to one 18,000 crore share buyback 4,500. It has also declared third interim dividend of 7 per equity share 1 each company.
Analysts at Jefferies said the company posted decent growth but was disappointed by weak margins. “While a buyback at a 17% premium may be a near-term catalyst for CMP, its rich multiples provide limited scope for revaluation relative to its growth. Maintain hold with a target price of 4,180,” he said.
Jefferies said stabilization of attrition as highlighted by management and normalization of subcontracting costs as net hiring catches up with demand, pushed margins into a narrow band of 25-25.5% during FY22-24. likely to keep.
TCS margin fell 60 basis points (bps) sequentially to 25% as lower employee costs were offset by higher subcontracting and higher travel/pass-through costs.
Brokerage house Emkay said that Q3FY22 revenue was higher than their expectation, while EBITDA missed margin estimates. It has maintained its buy rating on the IT stock with a target price of 4,150 ( 4,100 ago), seeing steady deal wins and consistent execution.
“Despite the positive surprise on revenue, TCS’s 3Q results offer limited scope for earnings upgrade due to margin disappointment,” Emkay’s note said.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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