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TCS: Views mixed on TCS on weak Q3 margins

Mumbai: Brokerages have mixed views on Tata Consultancy Services after the IT main’s higher than anticipated December quarter revenues however missed margin estimates.

While Credit Suisse, Jefferies, Bernstein, Nomura, and BNP Paribas elevated their target price for

, Goldman Sachs lowered it. JP Morgan and Morgan Stanley maintained their goal costs.

While sustaining a ‘maintain’ ranking with a goal value of ₹4,180, Jefferies stated TCS’s wealthy multiples provide restricted scope for rerating relative to its progress. “The company recorded a wholesome progress; nevertheless, weak margins disenchanted,” the agency stated.

Morgan Stanley stated higher progress greater than offsets the margin miss. Revenue progress stunned after a spot of two quarters, which ought to drive some optimism in the direction of the inventory, it stated. Morgan Stanley sees room for valuations to maneuver up and has a goal of ₹4,400 on the inventory.

According to Edelweiss, TCS delivered robust progress numbers, and the general pipeline stays strong. “We believe demand for core transformation remains strong, and this coupled with exemplary execution is likely to drive strong earnings,” Edelweiss stated in a word.

Motilal Oswal has maintained its optimistic stance on TCS, given its robust progress outlook. “We are encouraged by the robust topline growth in a seasonally weaker quarter. We expect this performance to alleviate the concerns on its growth potential and the likely drag from growing share of smaller deals in the market,” the brokerage stated, whereas reducing its FY22 EPS by 2%.

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



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