Tata Consultancy Services (TCS) recently reported its Q2 FY25 results, with revenue at ₹64,259 crore, growing by 7.6% year-on-year and 2.6% quarter-on-quarter. The net profit stood at ₹11,909 crore, marking a 4.9% YoY growth, though it declined by 1% QoQ. Despite a margin miss, the company declared a second interim dividend of ₹10 per share and recorded a net cash inflow of ₹11,932 crore. Amid mixed results, brokerage firms remain divided on the stock’s outlook. Here’s a summary of what major brokerage firms are targeting for TCS stock:
Brokerage firm recommendations for TCS
Upside/Downside from Current Market Price: 4,227.90 at 7AM, Oct 11, 2024
| Brokerage Firm | Rating | Target Price (₹) | Upside/Downside | Key Insights |
|---|---|---|---|---|
| Nomura | Neutral | 4,150 | -1.8% from | Modest miss at revenue, significant miss on margins; BSNL deal fueling growth but margin contraction due to higher third-party expenses. |
| Jefferies | Buy | 4,735 | +12% | Q2 missed estimates; de-growth in North America, margin miss; BFSI recovery and BSNL deal ramp-down to aid future growth. |
| HSBC | Buy | 4,540 | +7.4% | Slow demand recovery, minimal revenue growth, rare margin fall; still sees TCS as the best-managed company in the sector. |
| Morgan Stanley | Overweight | 4,910 | +16.1% | Lower than expected results; weak revenue quality, margin miss; BFSI revenue growth positive, India revenues strong, order book moderates. |
| Motilal Oswal (MOSL) | Buy | 5,400 | +27.7% | BSNL ramp-up fueling growth, US BFSI recovery on track; margins to improve sequentially, supported by large deal ramp-ups. |
Brokerage recommendations for TCS are mixed, with target prices ranging from ₹4,150 to ₹5,400. While some firms have highlighted concerns around margin contraction and revenue quality, others are optimistic about the company’s long-term growth potential, driven by large deals like the BSNL contract and a recovery in the BFSI segment.
Disclaimer: We are not SEBI Registered Research Analysts. This article is based on reports by brokerage firms and does not reflect our stance on the company stock. The views expressed by the brokerage firms in this article are solely their own and do not reflect the opinions of the publication or the author. The information provided is for informational purposes only and should not be construed as investment advice. Readers are advised to consult with a qualified financial advisor before making any investment decisions. The publication and the author hold no responsibility for any investment losses incurred based on the information provided.
