New Delhi: Global brokerages were mixed on () after the company announced its earnings for the quarter ended June 2022, which fell short of Dalal Street’s expectations.
TCS on Friday reported a 5.21 per cent year-on-year (YoY) rise in consolidated net profit at Rs 9,478 crore for the June quarter compared with Rs 9,008 crore in the same quarter last year.
TCS’ June quarter numbers were a miss on margin, profit and dollar revenue growth, even as the management commentary suggested demand visibility for FY23 remains intact.
A few analysts have cut FY23 and FY24 earnings estimates for TCS and suggested a price target for the stock in a wide range of Rs 2,800-3,700.
Goldman Sachs has maintained a buy rating on IT major with a target price of Rs 3,678. It said numbers were in line with the expectations as the focus on chasing demand remains intact.
Another brokerage firm UBS has a neutral rating on the counter with a target price of Rs 3,570 as it said margin headwinds were more severe than expectations. It is expecting a negative reaction on the stock in the near term.
Consolidated revenue for the quarter grew 16.2 per cent YoY to Rs 52,758 crore compared with Rs 45,411 crore in the year-ago quarter, the company said in a BSE filing.
Constant currency (CC) revenue growth stood at 15.5 per cent YoY. There was no detail on the dollar revenue growth in the earnings report.
Ebit margin stood at 23.1 per cent in the June quarter compared with 25 per cent in the March quarter and 25.5 per cent in the June quarter last year.
On the other hand, Jefferies has a hold rating and a target of Rs 3,140 on India’s largest software exporter as the management remains upbeat on the demand environment. “Deal wins were steady on a yearly basis at $8.2 billion.”
However, JP Morgan has the lowest target price of Rs 2,800 on the counter with an underweight rating as it believes that results and margins trajectory did not stand up to the burden of valuations.
“Margin miss was the highlight of the earnings,” it added. It has cut margin estimates by 30 basis points and earnings estimates by 2-3 per cent over FY23-25.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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