on Friday reported a 5.21% year-on-year rise in consolidated net profit at ₹9,478 crore. Shares of TCS ended down 0.7% at ₹3,264.85 on Friday.
“The first quarter miss on topline and margins will drive consensus estimates lower by 3-4%. While management commentary points to resilient demand so far, we believe macro uncertainty will be an overhang on valuation multiples,” said Morgan Stanley, which has an equal-weight rating on TCS with a target price of ₹3,900.
JP Morgan has retained an underweight rating on TCS with an unchanged target price of ₹2,800. “We expect margins to stay below 25% over the next three years and earnings growth to be in the single digits which makes these valuations excessive,” said JP Morgan.
HSBC has trimmed the target price on TCS to ₹3,555 from ₹3,570 while retaining a hold recommendation while
has maintained a buy rating with a target price of ₹3,730. Securities has maintained an add rating with a target price of ₹3,620.
Nomura has lowered the target price to ₹2,910 from ₹2,950 while the rating remained unchanged at ‘reduce’. Goldman Sachs has maintained a buy rating with a lowered target price of ₹3,678.
Maintaining a neutral rating and target price of ₹3,570, UBS said it expects a negative reaction to the stock in the near term due to sharp margin compression unless peer companies post higher negative surprises.
