JPMorgan has maintained its “Overweight” rating on Tata Consultancy Services (TCS) while lowering the target price to ₹5,100 from ₹5,200. With the current market price at ₹4,227.90, this implies an upside of approximately 20.6%.
The brokerage noted that TCS’s revenue declined by 0.4% quarter-on-quarter in constant currency terms, marking the weakest performance since the pandemic. Most of the growth was driven by a margin-dilutive BSNL contract, which significantly impacted profitability. However, the firm expects growth to recover in the second half of the year, supported by the financial services and technology sectors.
JPMorgan also mentioned that the unwinding of the BSNL contract should help TCS’s margins revert to more traditional levels. The brokerage reduced its margin and earnings per share estimates by 50 basis points and 2% for FY25.
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