TCS Q4: Tata Consultancy Services (TCS), India’s largest IT services company, on Monday recommended a final dividend of ~Rs 22 per equity share of Re 1 each. Is it the right time to invest in TCS stocks? Know what experts are saying
TCS Q4: Tata Consultancy Services (TCS), India’s largest IT services company, on Monday recommended a final dividend of ~Rs 22 per equity share of Re l each. The proposed final dividend shall be paid on the fourth day from the conclusion of the 27th Annual General Meeting, subject to the approval of the shareholders of the company.
TCS made a record hiring by adding 1,03,546 people for the year ending March 2022, up from over 40,000 people it hired in FY21. The company onboarded close to 78,000 freshers in FY22, up from 40,000 it had in the last year. However, attrition continues to be a concern for the firm. The company’s attrition increased to 17.4 per cent in the quarter, from 8.6 per cent in the beginning of the year and 11.9 per cent in the December 2021 quarter.
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TCS reported a consolidated net profit of Rs 9,926 crore for the fourth quarter ended March 2022, registering a 7 per cent on-year growth. On a sequential basis, the growth in profit is 2 per cent. The company had reported a consolidated profit after tax (PAT) of Rs 9,246 crore in the corresponding quarter last year. In the December quarter, its PAT stood at Rs 9,769 crore.
Shares of Tata Consultancy Services (TCS) traded flat at Rs 3,701 on the BSE in Tuesday’s intra-day trade in an otherwise weak market. The stock hit a high of Rs 3,723.50 and a low of Rs 3,650 on the BSE intra-day trade so far. It closed at Rs 3,696.40 on Monday. In comparison, the S&P BSE Sensex was down 0.79 per cent at 58,500 points at 09:37 am.
Should You Buy the Stock?
Motilal Oswal Financial Services remains positive on TCS’ leadership position in the market, with a ‘buy’ rating on the stock and a target price of Rs 4,240. “Given TCS’ size, capabilities, and portfolio stretch, it is rightly positioned to leverage anticipated industry growth,” the brokerage firm added.
Prabhudas Lilladher gave TCS a ‘Buy’ call at a target price of Rs 4, 221. They said, “We remain structurally positive on TCS given its – 1) strong growth
momentum on a high base, 2) best in class supply-side metrics with industry-leading margin profile, and 3) strong client mining abilities further enhanced
by client-centric new org structure. We cut our EPS estimates by ~1.5%/0.8%
for FY23/24 led by a cut in margin estimates. We arrive at a DCF based TP of
INR 4,221 (earlier TP of Rs. 4360; implied earnings target multiple of 31x on
FY24 EPS). TCS is currently trading at 31x/27x on FY23/24 EPS of 119.6/136.6
with revenue/EPS CAGR of 12.5%/16.2% over FY22-24E.”
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Rajesh Palviya, head of technicals, and derivatives at Axis Securities said there could be some short-covering in TCS as well as its peers but not so much in Infosys as investors will refocus on the company’s quarterly earnings due on Wednesday. TCS shares could rise to 3,900-4,000 in the April series, he said.
