TCS share price in focus post Q2 results: Brokerage views mixed on muted earnings

Tata Consultancy Services Ltd (TCS) reported a net profit of ₹11,342 crore in the September quarter, registering a growth of 8.7 per cent, compared to ₹10,431 crore in the corresponding period last year. Sequentially, the consolidated net profit was up 2.4 per cent as the IT major reported a profit of ₹11,074 crore in the preceding June quarter.

Analysts said that while revenues missed their estimates the improved operating performance led to the beat in net profits

Various Brokerages, however, remain mixed on the outlook looking at global slowdown concerns.

Also Read- TCS Q2 Results: Net profit to interim dividend, here are the 5 key numbers

Jefferies India

Commenting on Q2FY24 performance analysts at Jefferies India Pvt Ltd said that there is no recovery in sight and hence they maintain Hold ratings with revised price target of ₹3,690. The Jefferies analysts said that TCS's 2Q revenues were disappointing, however profits beat estimates due to higher-than-expected margins.

Emkay Global financial Services

Emkay Global financial Services also maintain a hold rating on TCS with a Price target of Rs3,550 a share as per them TCS’s Q2 operating performance was a mixed bag, with a miss on revenue and a beat on EBIT margin expectations.

Also Read -TCS announces its second interim dividend of ₹9 per share; here are details of ex-dividend, record, payment dates

Motilal Oswal Financial Services

Motilal Oswal, Financial Services however maintained a positive stance on TCS with a target price of ₹4,060. They said that given its size, order book and exposure to long-duration orders and portfolio, TCS is well positioned to withstand the weakening macro environment and ride on the anticipated industry growth.

HDFC Securities Ltd

HDFC Securities have a given a target price of ₹3,800 and is based on 26 times September-25 estimated earnings per share (5Y/10Y average at 26x,23x). The contrast between strong deal wins and growth deceleration indicates a slightly protracted recovery ahead for Tata Consultancy Services (TCS), as discretionary projects remain challenged, said the brokerage 

In addition As per CNBC TV 18, 

Goldman Sachs have a Buy call on TCS with price target of ₹4020 a share

HSBC also has given HOLD call on TCS with target at ₹4020 a share

Morgan Stanley has given equal weight rating on TCS with price target at ₹3590 a share

Nomura has given a reduce call with price target of ₹3030 per share

Bernstein has given outperform call on TCS with target price of ₹3950 per share.

Citi has given a sell ratings on TCS with target at ₹3170 per share