Motilal Oswal Financial Services (MOSL) has maintained its “Buy” rating on Tata Consultancy Services (TCS), with a target price of ₹5,400. With the current market price at ₹4,227.90, this implies a potential upside of approximately 27.7%.
The brokerage noted that the ramp-up of the BSNL deal continues to drive growth for TCS, while the recovery in the US BFSI sector is progressing well. The 60 basis points decline in EBIT margin during Q2 FY25 was attributed to higher pass-through revenues, but Motilal Oswal expects margins to improve sequentially, with wage hikes now behind and TCS’s best-in-class talent pyramid in place.
MOSL further believes that the BSNL deal and other large deal ramp-ups will continue to support TCS’s revenue growth throughout FY25.
Disclaimer: The information provided is for informational purposes only and should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions.
