As of 12:24 PM, TCS stock was trading at Rs 3,884.30, up Rs 150.70 or 4.01% on the NSE.
According to ET, several brokerages expressed optimism in TCS, with Morgan Stanley upgrading the stock to ‘Overweight,’ Motilal Oswal and Nuvama reiterating their ‘Buy’ stance, and Kotak Institutional Equities maintaining an ‘Add’ rating.
TCS reported a 2% YoY growth in consolidated net profit for Q3, reaching Rs 11,058 crore, while revenue increased by 4% to Rs 60,583 crore.
TCS: Here’s a what various brokerages have recommended
Morgan Stanley (Target: Rs 4,240):
Morgan Stanley upgraded TCS stock from ‘Equal Weight’ to ‘Overweight’ and increased the price target from Rs 3,900 to Rs 4,240. In their post-earnings review, the brokerage highlighted TCS’s strong revenues and the EBIT margin reaching 25% earlier than expected. The management’s positive outlook suggests potential growth ahead.
Despite underperforming peers in 2023, Morgan Stanley believes the stock’s not cheap, and the premium could persist if TCS improves execution.
Motilal Oswal (Target: Rs 4,250):
Motilal Oswal continues to recommend buying TCS shares with a target of Rs 4,250, after the company exceeded earnings expectations amid demand challenges.
Motilal also stated that TCS is well-prepared to handle the tough economic conditions and benefit from industry growth, thanks to its size, significant order book, and involvement in long-term projects.
Because of its strong market leadership and effective execution, the company has maintained top-tier margins and impressive return ratios, according to the note. The current target implies a 25X FY26E EPS with a 14% potential upside.
Nuvama (Target: Rs 4,500):
Nuvama praised TCS’s strong Q3FY24 results, better than expected, and maintained a buy recommendation with an increased target of Rs 4,500 from the earlier Rs 4,400.
Nuvama pointed out that according to management, the current economic conditions are similar to the last quarter, and there is a sustained strong demand outlook. Nuvama also highlighted the recovery in its BFSI vertical.
Nuvama further says “We upgrade FY24E/25E/26E EPS (+1.4%/+1.4%/+1.7%).”
Kotak Institutional Equities (Target: Rs 4,115):
Kotak, in its review, kept the ‘Add’ rating for TCS. The company’s revenue growth surpassed Kotak’s expectations, driven by the BSNL deal. Effective cost management contributed to a better-than-expected improvement in margins, according to Kotak.
The brokerage says “We cut our revenue growth for FY2025E while keeping estimates unchanged for FY2026. EPS estimates are largely unchanged and so is our fair value of Rs 4,115.”
